Many caregivers and patients are confused between Medicaid and Medicare difference, which is not really surprising, as the two have very similar names. Though both are government-sponsored programs that offer medical coverage, there is a huge difference in how these two programs work and how eligible individuals receive their benefits. This entry will be about Medicare vs Medicaid, and will focus on how each program works and how one is different from the other.

What is Medicare and Medicaid, Definition and Difference

Both Medicare and Medicaid are taxpayer-funded medical programs established by the US government in 1965, and they have very different requirements and coverage. In simplest terms, Medicare is a health insurance program funded by the Federal government, while the Medicaid is a medical assistance program funded by the federal state.

Defining Medicare and its Coverage

As a Federal health insurance program, Medicare is the one that pays the hospital and medical care to patients over 65 years of age, or disabled, and individuals with permanent kidney failure. All patients eligible are covered regardless of their income, but it is NOT for free. Patients only have to pay a part of their hospitalization and premium medical care cost, and because this program is run by the government of United States, its rules, regulations and coverage is the same anywhere in the country.

This program is compost of four parts, these are:

Part A – hospitalization coverage.

Part B – medical insurance.

Part C – covers privately purchased medical supplemental insurance that is beyond the coverage of Part A and B.

Part D – coverage for prescription drugs.

Defining Medicaid and its Coverage

As a federal and state program, the aim of Medicaid is to lower the medical cost of low-income individuals and families, especially for long-term custodial care. Federal government funds half the cost of each medical program, more affluent states receive less funding, while the less affluent states receive more. Because of the federal government and state’s partnership, there are over 50 different programs of Medicaid across the country, one program for each state, and each state can provide additional benefits, such as optometrist services, eye glasses, prescription drugs, medical transportation, physical therapy, dental services, and prosthetic services. Individuals eligible for this coverage don’t need to pay anything.

This program is based on need and social welfare of the patient. Thus, eligibility for this program depends on the person’s income, such as children under 6 years of age from a low-income family, pregnant women with family income below the FPL’s (Federal Poverty Level) 133%, etc.

Medicare vs Medicaid

Again, Medicare is an insurance program from the federal government, while Medicaid is an assistance program from the state of Texas.

It doesn't have to be an issue of which one you really need, or Medicare vs Medicaid, which is better? Rather, it should be, Medicare and Medicaid, as eligible individuals can enjoy the benefits of these two programs from the government. There are some services that Medicare can’t cover, that Medicaid can, such as extended long-term care, and it can pay the out-of-pocket cost of the former. These programs can work together to provide the needed medical coverage of elderly and low-income individuals.