What's the difference between Medicare and Medicaid?

Many are confused about benefits provided by Medicare and Medicaid, or the basic requirements of eligibility for each. Basically, Medicare was designed to pay for health care services provided to Social Security beneficiaries starting age 65; while Medicaid is controlled by state governments, designed to provide health care coverage for low-income families and individuals.

Medicare was first designed and implemented in mid-1960s, providing hospitalization insurance (Medicare Part A) to individuals who receive Social Security benefits, and also medical insurance (Medicare Part B) to help pay for non-hospital services such as medical surgical supplies, and physician’s services.

Medicare Part A is provided free to individuals over 65 or eligible for Social Security benefits. This portion covers inpatient care, long-term care, skilled nursing facility care, some home health and hospice care. Benefits begin the day the beneficiary is admitted to hospital and ends if they haven't been hospitalized for 60 consecutive days. Home health care under Medicare Part A has no limitations on length of stay, no co-payments, and no deductibles.

Medicare Part B covers services as physician and surgeon services, also covering approved non-physicians, such as clinical workers, physician’s assistants, and others. Services also cover outpatient clinic or emergency services, including ambulance services and surgeries. Medicare Part B may help to cover home health care not covered under Part A.

Medicaid was designed to provide medical assistance to low income individuals and families. Medicaid is rendered by state governments, with varying eligibility conditions. Medicaid services generally offer medical assistance for services such as inpatient and outpatient hospital services, prenatal care, emergency services, physician’s services, laboratory and x-ray services, family planning services and home health care for elderly.

Medicaid offers assistance to individuals of any age, and is financed by state, federal and county tax dollars. Eligibility is based on financial need, but if an individual is covered by both programs, services must be covered by Medicare before Medicaid.

Compare benefits of both programs and become familiar with what’s included and what’s not. Understanding the differences between Medicare and Medicaid will help you make better medical and financial decisions regarding health care.