Medicaid vs. Medicare: Which is Right for You?

The Medicare & Medicaid Confusion

Most people are confused with the differences between Medicare and Medicaid. They even use these two terms interchangeably in conversation. While both are government programs that help provide health care for individuals, it is at that point where the similarities cease. In reality, their purpose, process, funding and reason for existing are very different.

Medicare Overview

The purpose of Medicare is to provide medical healthcare benefits for those who are over the age of 65 or blind or disabled; while the purpose of Medicaid is to provide healthcare benefits for the impoverished or low-income strata of the United States.

Medicare is the primary health insurance coverage for those 65 and older who have or whose spouse has paid into the program based on a percentage of their annual income. Many people believe that Medicare will pay for long term care (often called “custodial care”); such as: “In Home Personal Care” or “Nursing Home Care” or “Assisted Living;” but it doesn’t!

The confusion is made worse, because Medicare does pay for rehabilitation – if a senior citizen is enrolled in the traditional Medicare plan and is hospitalized for a stay of at least three days, and is then admitted into a skilled nursing facility (which can be a nursing home) for rehab, then Medicare may pay for up to a maximum of 100 consecutive days per benefit period as long as the patient is improving and responding positively to the rehabilitation.

Since diseases like Alzheimer’s and Parkinson’s have no known cure today, rehabilitation is not possible – and obviously, Medicare isn’t going to pay for it. Medicare is a federal program with federal rules and regulations which means there is no difference in the program from state to state.

Medicaid Overview

The Medicaid program was created in 1965 for the purpose of providing medical assistance to low-income Americans, particularly children, through a shared state-federal commitment. Today, Medicaid is an entitlement program that finances medical care, as well as long-term care (only in a nursing home) for those in need who meet certain federal requirements.

Medicaid is funded by the American taxpayers. Generally, 50% to 80% of the cost comes from the federal government and the remaining share comes from the state revenue department. Each state administers its own version of Medicaid under the federal rules – this means rules can vary from state to state (even county to county) rather dramatically.

Summary of Medicaid & Medicare Differences:

Medicare

  • Medical Health Insurance generally for Seniors that are 65 and Older
  • Generally Must Have Contributed to Medicare System to be Eligible
  • Federally Controlled Program with Uniform Application Across the Country
  • Pays for Primary Hospital Care and Related Medically Necessary Services; such as Doctor Visits, X-Ray Services, Lab Test, etc.
  • Pays for No More than 100 Days of “Nursing Home” care for Rehabilitation Only

Medicaid

  • Needs-Based Health Care Program, Generally for Low-Income Americans
  • Must meet income & Asset Limits as well as Additional Government Requirements
  • Administered and Controlled by the State Where You Live, with Significant Differences in their Regulations and their Application of Health Care Benefits
  • Pays for Needed Physician Services, Medications, Hospital Services, Skilled Nursing Services and Different Optional Services Depending on the State
  •  Pays for Long Term Care – Only in a “Nursing Home”

Conclusion

While you are in your working years as a taxpayer, you are contributing to Medicare, and when you retire will receive Part A coverage at little to no cost. Because there are often critical gaps in coverage with Medicare it is often individuals will need additional supplemental insurance that carries an additional monthly premium.

Medicaid is a needs-based program. Although states have the option of charging out-of-pocket fees, certain groups, such as children and people living in institutions, are generally exempt from these costs.

With people living longer, an unfortunately many Americans unable to save enough to make it through all of retirement so more and more seniors will find themselves qualifying for Medicaid. In addition to helping with medical costs, Medicaid offers coverage not normally available through Medicare, such as extended nursing-home care and custodial or personal care services.

Angel Companions Senior Care serves all 27 Greater Atlanta counties and has the most experienced in home senior caregivers. We can help you find out what government assistance is available to offset the costs of in home elderly care. Whether you are a veteran or just retired and in need of help, we are here!  If you have any questions please use our contact page form or call us today at 770-579-5000!