Medicare and Medicaid are both government-funded programs that help pay for medical care. Medicareis run by the federal government's Centers for Medicare & Medicaid Services (CMS), although parts of the program are operated by private insurance companies. Each state's Medicaid program, on the other hand, is run by its own state agency. Here's a rundown of how the programs work.
Medicare: Almost everyone age 65 and older is automatically eligible for all four parts of Medicare. People under 65 are eligible for Medicare if they've been receiving Social Security disability benefits for at least 24 months.
Medicaid: This program is only for people with low income and few assets (not counting their home). Eligibility rules vary somewhat from state to state. In some states, you're eligible even if your income or assets are slightly over the limits if you also have high medical bills.
Medicare: There are four parts to Medicare, each covering a different type of care. You enroll in each part separately and may choose to enroll in some or all of them. You have to pay premiums, deductibles, or co-payments with each part.
- Medicare Part A covers inpatient care in a hospital, rehabilitation facility, or skilled nursing facility. It also covers hospice care and some in-home care (but not long-term in-home or nursing home care).
- Medicare Part B covers doctors' bills and outpatient care, including laboratory work, physical therapy, limited in-home care, and medical equipment and supplies.
- Medicare Part C, also called Medicare Advantage, provides Parts A and B through a managed care plan (like an HMO) operated by a private insurance company. Some Part C plans also cover prescription drugs.
- Medicare Part D provides prescription drug coverage through individual plans offered by private insurance companies.
Medicaid: Medicaid covers all medical care, except for prescription drugs for people eligible for Medicare. If you're enrolled in Medicare Part A and B or Part C, Medicaid covers certain care that Medicare doesn't, while also paying Medicare premiums, deductibles, and co-payments. However, Medicaid only covers care from providers who participate in Medicaid.
There's no monthly premium for Medicaid, but in some states there's a small co-payment for certain covered services.