Do you feel confused when people start talking about the difference between Medicare and Medicaid?
If so, you are not alone. One study found that only 4% of Americans could correctly explain the basic terms of their health insurance policy.
The thought of navigating the world of health insurance on your own may seem overwhelming. This is especially true as you approach your “Golden Years” and the reality of Medicare vs. Medicaid stares you in the face.
In this post, we will look at the difference between Medicaid and Medicare so you can make an informed decision.
Medicare is the primary health insurance provider for Americans over 65.
It can also provide coverage for those under 65 who receive Social Security Disability Insurance benefits.
Medicare is composed of 4 major parts. Here’s a brief rundown of each one.
Medicare Part A
Part A is what most people think of when they hear the term “Medicare.”
It covers hospitalization for those over 65 as long as they (or their spouse) worked and paid Medicare taxes for at least 10 years.
For most enrollees, this aspect of Medicare is free. However, you still have to pay deductibles and co-pays for certain services.
Medicare Part B
If you are eligible for Part A, you are also eligible for the health insurance benefits offered by Medicare Part B.
Part B offers coverage for services and equipment that are medically necessary. These include doctor’s visits, x-rays, lab work, and outpatient procedures.
This aspect of Medicare is not free. The monthly premiums are usually deducted from your Social Security payments.
Medicare Part C
Many who enroll in Medicare Parts A and B also sign up for supplemental coverage through Part C.
Also called “Medicare Advantage,” Part C works much like a PPO or HMO plan you likely had during your working years. It may also include dental and vision plans.
Medicare Part D
The final piece of the Medicare puzzle is Part D, which covers the cost of prescription drugs.
It includes a combination of monthly premiums and co-pays with a yearly deductible.
While everyone qualifies for Medicare once they reach 65—regardless of income—Medicaid is open to low-income families of all ages.
Each state has unique (and strict) requirements for Medicaid eligibility.
If you do qualify, you typically pay nothing for most healthcare services. Supplements are available for dental, vision, and prescription drug coverage.
Medicaid may also be used for long-term care funding for those who have no other way to pay for it.
A Medicaid planning attorney can provide guidance and help you understand exactly what you might qualify for.
Medicare vs. Medicaid: Which Is Right For You?
In the decision of Medicare vs. Medicaid, your options depend on your personal situation and finances.
Which aspects of Medicare will you need after you turn 65? Will you qualify for Medicaid at that time, or might you already qualify for it?
The good news is you do not have to figure it out on your own. If you are working hard to figure out the difference between the two programs, or if you qualify, we may be able to help. Additionally, consider our Social Security disability advocacy, and estate planning services. There is a good chance you are going to need these.