The Difference Between Medicare vs Medicaid

There are big differences when it comes to comparing Medicare vs Medicaid…and even though the names are similar they serve completely different purposes.

Medicare

First, Medicare is a Federal health insurance program that helps those over age 65 to pay for their health-related expenses, whether those expenses are hospital stays (Medicare Part A), doctors visits and durable medical equipment (Medicare Part B) or prescription drugs (Medicare Part D).

Medicare Part A is your coverage for in-patient hospital stays.  For most people, there is no monthly premium to receive Medicare Part A benefits.

Medicare Part B is medical insurance, and it covers trips to the doctor as well as durable medical equipment. 

The current monthly premium for Medicare Part B is $104.90 (high income individuals will pay more) and Medicare Part B covers 80% of the costs related to doctors visits and durable medical equipment.  To pay for the remaining 20% of these costs, many seniors choose to purchase Medicare Supplement Insurance Plans.

Medicare Part D is the Medicare prescription drug benefit.  These policies are reasonably priced, come with affordable co-payments and can assist seniors in lowering their prescription drug costs.


Video Overview of Medicare vs Medicaid


Medicaid

Medicaid is far different.  Medicaid is a joint Federal and State program to provide part of the social ‘safety net’ for the elderly and the poor.

Due to the fact that the focus of this website is on senior citizens, when discussing Medicare vs Medicaid I will be discussing Medicaid from the perspective of senior citizens.

Medicaid for seniors exists for those who are unable to pay for their own health insurance.  It exists in two parts, community Medicaid and long term care Medicaid.

Community Medicaid will pay for home health services for very-low-income individuals. I personally went through the process for this for my mother.  It requires a 90-day look back on her financial records as well as providing other information such as birth certificate, social security card and proof of citizenship. 

Each state has its own requirements so you will need to speak with your state Medicaid office or your local Department of Social Services to determine the exact information needed.

One of the big differences when assessing Medicare vs Medicaid is the spend down provision, which my mother got hit with. 

The spend down occurs when you exceed your state’s income guidelines and you have to pay a certain amount of money out-of-pocket on a monthly for these services before Medicaid will begin payments.

medicare vs medicaid

Once my mother needed to be nursing home care due to a heart attack, that is when I became familiar with long term care Medicaid, which is a much more involved process. 

There is no comparison with Medicare vs Medicaid in this regard.

Medicaid will look back on the applicants financial records for 5 YEARS!!!  And they will question everything (you can see my mother’s pile on paperwork right here.  That is the result of 4 months of research into every facet of her life)

What they are looking for in this instance is if the applicant transferred any money out of their name into a relative’s account so that they could financially qualify for Medicaid.  And with the cost of a nursing home at around $400 a day, Medicaid will take this look back seriously.

I would suggest you do the same.  Under no circumstance should you ever consider lying or misrepresenting information on the application.  That is called fraud and there are severe criminal and financial penalties for that.

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