Medicare and Medicaid are both federal government programs that provide healthcare coverage for their beneficiaries. They are set apart by qualifications unique to each program, including age, income, covered services, and costs.
Making The Transition to Medicare
As you transition to Medicare, there are some key things to consider. First, there are four parts of Medicare: A, B, C, and D. Parts A and B make up “Original” or “Traditional” Medicare.
- Part A is your hospital insurance.
- Part B is your medical insurance.
- Part C – Medicare Advantage – is an alternative to Original Medicare with additional benefits.
- Part D is a prescription drug coverage
There are two main options under this umbrella: Original Medicare and Medicare Advantage. Both programs are intended to provide healthcare benefits for individuals of age 65 and older. Younger individuals receiving Social Security disability benefits can also qualify. Some differences include coverage, cost, and where they can be purchased.
Original Medicare is offered and funded by the government. It consists of Part A (hospital insurance) and Part B (medical insurance) — intended to cover the basics when people visit the doctor or become admitted to the hospital. You can also add Medicare Part D to your Original Medicare plan for prescription drug coverage.
You don’t have to pay a premium for Part A if you or your spouse paid Medicare taxes for at least ten years. Medicare taxes are generally deducted from most working people’s paychecks.
Part B and Part D will require monthly premiums, varying slightly in each situation.
- Part A will cover inpatient and hospital coverage.
- Part B traditionally covers outpatient care, medical equipment, and doctor’s visits.
- Part D provides stand-alone prescription drug coverage.
Medicare Advantage (Part C) is offered by private insurance companies and is an alternative to Original Medicare. These plans provide the same coverage as Parts A and B. Include additional benefits like transportation, vision, hearing, dental care, and prescription drug coverage. Another benefit is that Medicare Advantage plans will limit out-of-pocket costs annually. With Original Medicare, there’s no yearly cap on your out-of-pocket expenses.
Medicaid is a federal and state program that provides health coverage for those with a low income and limited resources, based on qualifying needs, like pregnant women and people with disabilities. To be eligible for Medicaid in New Jersey, you must be a resident of The Garden State, a U.S. citizen, or a qualified immigrant and meet the income and resource requirements.
Americans who meet Medicaid eligibility requirements are guaranteed coverage. States also secured federal funding without a cap for covered services. No premiums and most prescriptions will be covered also. It includes inpatient and hospital coverage as well as outpatient and medical coverage.
Children from low-income families and individuals with disabilities are typically covered long-term. However, pregnant women’s coverage will expire within a specific time frame following the birth of their child.
Difference between Medicare and Medicaid
One key difference between Medicare and Medicaid programs is eligibility. Medicare is available to people of age 65 and older, as well as some younger people with disabilities, but Medicaid is designed for low-income individuals and families, regardless of age.
Another difference is the way the programs are funded. Medicare is funded through a combination of payroll taxes and premiums paid by beneficiaries, while Medicaid is funded through a combination of federal and state funds.
A third difference is the types of benefits covered by the programs. Medicare covers hospital stays, skilled nursing facilities, hospice care, some home health care, outpatient medical care, and prescription drugs. Medicaid covers a broader range of healthcare services, including primary and preventive care, hospital stays, prescription drugs, and long-term care. However, the specific benefits covered by Medicaid vary from state to state.