Are Medicare and Medicaid the Same?
Medicare is a federal program funded by tax dollars that provides health coverage if you are 65 or older, under 65 and disabled, or a dialysis patient. Eligibility is not income-based but instead relates to the number of years you paid Medicare payroll tax into Social Security as an employee. Once enrolled in Medicare, you pay nothing for Medicare Part A premiums, but you pay deductibles and copays for services. You pay premiums for Medicare Parts B, C, and D coverage if you enroll in those services. http://www.medicare.gov/
Some people confuse Medicare with Medicaid thinking that Medicare also helps with living expenses. It does not. Though Medicaid receives some federal aid, it is a State-controlled program that provides health insurance to low-income individuals of any age. Each State operates Medicaid programs based on its guidelines and regulations; therefore, qualifications vary per State. Most States establish requirements based on applicant income and State resources. https://www.healthcare.gov/medicaid-chip/eligibility/ http://www.medicaid.gov/
Qualifying for Medicare – Two Ways
1. You qualify for Medicare if you are 65 years old or older and
- You are a U.S. citizen or permanent legal resident who has lived in the U.S. for at least five years; and
- You or your spouse paid into Social Security or railroad retirement benefits long enough to be eligible to receive benefits (about ten years); or
- You or your spouse are a government employee or retiree who has paid Medicare payroll tax
2. You are younger than 65, and one of the following applies:
- You have received social security disability benefits for at least 24 months (doesn’t have to be consecutive), or
- You receive a disability pension from the Railroad Retirement Board and meet certain conditions, or
- You have Lou Gehrig’s Disease (amyotrophic lateral sclerosis/ALS), which qualifies you immediately; or
- You have permanent kidney failure requiring regular dialysis or a kidney transplant—and you or your spouse paid Social Security (SS) taxes and met the age/S.S. contribution requirements.
Enroll in Medicare at Age 65
You enroll in Medicare when you turn 65. If you are getting close to age 65, you have three months before your birthday, the month of your birthday, and three months after it to enroll. If you don’t enroll during that time, you must pay a late fee when you do.
Enrollment Occurs Annually Except for Special Life Events
Enrollment is once a year unless you have a significant life event that occurs, and then you have thirty days from that event to enroll.
Choose Your Plan
When enrolling, you have choices to make. The Medicare website has additional information on Parts B and D to help you make those choices. I’ve included a summary of the choice options. Once you become approved for Medicare, you receive a book that explains your coverage.
Summary of Medicare Options
Part A – Hospitalization
Part A covers hospitalization and is premium-free if you have worked enough years to qualify for social security benefits. If you didn’t, you might still be able to buy Part A coverage. Hospitalization covers the following:
- Inpatient care in a hospital
- Inpatient care in a skilled nursing facility (not custodial or long-term care)
- Hospice care
- Home health care
- Inpatient care in a religious nonmedical health care institution
Part B – Outpatient Services
Part B provides medical insurance (i.e., doctor’s appointments). Participants pay a monthly premium and a copay at doctor’s appointments when they participate in part B.
If you don’t sign up for Part B during the open enrollment period when you become eligible, you must pay a late penalty. Some exceptions apply, such as being covered by a spouse’s employer’s insurance. Part B covers medically necessary doctor’s services, outpatient care, home health services, durable medical equipment, and other medical services, including many preventive services.
Part C – Alternative to Medicare Coverage (Medicare Advantage)
Part C is an alternative to Medicare cover. Medicare-approved private insurance companies offer Medicare Advantage Plans that must follow the rules set by Medicare. Medicare Advantage Plans may offer extra coverage, like vision, hearing, dental, and other health and wellness programs. Most plans include Medicare prescription drug coverage (Part D).
Part D – Prescription Drug Plan
Part D – Medicare offers Prescription Drug Coverage to everyone with coverage through Medicare-approved private companies. There is a monthly premium for prescription drug coverage that is an additional cost to the premium associated with Part B and Part C if required.
Medicare Does Not Cover The Following
- Long-term care (also called custodial care, nursing home placement)
- Most dental care
- Eye exams related to prescribing glasses
- Cosmetic surgery
- Hearing aids and exams for fitting them
- Routine foot care
An Example of How Medicare Works for Long Term Conditions
Medicare covers hospitalizations provided the person is making progress toward recovery. Once progress stops occurring, custodial care applies, and Medicare coverage ceases. At that point, the patient becomes a self-pay patient unless they have other medical coverage.
Here’s a summary of your potential cost under Medicare’s Maximum Limits
|Days 1-20: $0 coinsurance||$0|
|Days 21-100: $194.50 coinsurance each day||$15,560|
|Days 101 and Beyond – full cost||Full cost|
Most people do not realize the potential gap Medicare leaves in coverage until they have a significant illness or accident. Unfortunately, it’s a considerable coinsurance, and if you do not have gap coverage, you will undoubtedly feel the hit to your income. Therefore, when you sign up for Medicare, most people buy a gap or supplemental insurance.