Medicare vs. Medicaid: What You Need to Know

A lot of people ask about the differences between Medicare and Medicaid. These two government programs are often mentioned together and both provide basic healthcare benefits. So, it’s only natural that there’d be some confusion about the difference between the two.

Medicare

Medicare is a federal program that provides health coverage to you if you’re 65+ years old or have been on disability benefits for 24 months. This program is divided into several parts, A, B, C, and D.

Part A coverage is available without premiums to Americans who:

• Are 65+ years of age or have been receiving disability for at least 24 months;
  AND
• Have either paid or had a spouse pay Medicare taxes for at least 10 years.

This coverage is mostly for inpatient care at hospitals and nursing facilities, but also includes coverage for hospice and home health services.

Parts B, C, and D are optional coverage plans that you could pay to receive. Each covers a different range of services. Part B coverage is part of the original Medicare program and covers doctor & clinical lab services, outpatient & preventative care, and physical/occupational therapy.

Medicare Part D cover prescription drug plans. Medicare Part C, or Medicare Advantage (MA) plans combine benefits from parts A, B, and/or D into a single plan.

The key characteristic of Medicare is that it’s an insurance program that is available to qualified recipients regardless of their income. The funding for Medicare is secured through two separate trust funds:

1. The Hospital Insurance Trust Fund. This trust is primarily funded through payroll taxes, Social Security taxes, interest earned on trust fund investments, and payments by those not eligible for the premium-free Part A plans. This fund primarily pays for Medicare Part A coverage expenses.
2. The Supplementary Medical Insurance Trust Fund (SMI). SMI pays for Part B and D benefits, and is funded through premiums payed by enrollees and funds authorized by Congress.

Medicaid

Where Medicare is a federally-funded insurance program, Medicaid is a federal and state program with benefits that vary from one state to the next. Part of the funding for Medicaid comes from the Federal Medical Assistance Percentage (FMAP) program, and the State covers the rest.

In Florida, eligibility for Medicaid is determined by one of two regulatory bodies:

• The Department of Children and Families (DCF). This organization determines eligibility for children, their caretakers/relatives, pregnant women, form foster care wards, non-citizens with emergency medical conditions, and aged or disabled individuals not currently receiving Supplemental Security Income (SSI).
• The Social Security Administration (SSA). The SSA usually determines Medicaid eligibility for SSI recipients—and SSI recipients are automatically eligible for Medicaid.

A key difference from Medicare is that Medicaid is considered an assistance program—it’s typically reserved for low-income individuals and families. Also, to receive Medicaid in Florida, you must be a Florida resident.

Wondering if you qualify for Medicare or Medicaid so one of these programs can help cover your medical expenses? Consult an experienced disability advocate, or apply for Medicare/Medicaid online.