With all the changes to the American healthcare system in recent months, it can be very confusing to figure out what kind of health insurance coverage you need, how to afford it, and where to get it from. If you have a low or fixed income, thinking about health insurance can cause stress and anxiety, no matter your age, race, or background. Having health insurance might not seem like a priority if you’re on a budget, but it is necessary protection that can make your life financially easier in the long run.
Two federal programs have been created to help people afford a basic level of health insurance. Medicare and Medicaid were both created separately to help older and low-income people afford health insurance since private health insurance can often be prohibitively expensive. Here are a few of the differences between Medicare and Medicaid and how one or both of these programs could help you or someone close to you receive affordable health care.
The Difference Between Medicare and Medicaid
Medicare and Medicaid are both federal programs, but they are funded and run by different parts of the government. Medicaid follows federal guidelines but is funded and run at the state level. So while Medicare will be consistent no matter where you live or where you buy it from, Medicaid can vary depending on the state and income level.
Medicare: Medicare is designed for people aged 65 and older or individuals with specific disabilities or diseases. If you get Social Security benefits or Railroad Retirement benefits, you could also qualify for Medicare even if you aren’t 65 yet. Eligible people are automatically enrolled in Medicare when they turn 65. This health insurance, called Original Medical care, provides a certain amount of coverage for hospital and medical insurance costs that seniors face as they get older.
Part A of Original Medicare can be premium-free, depending on the taxes you’ve paid. However, part B has a monthly premium, and other plans also come with some out-of-pocket payments.
Medicare enrollment doesn’t depend on your income. You can choose to be enrolled in Medicare or through another private insurance company. Additionally, people can choose to be part of a Medicare Advantage plan or obtain Medigap insurance, which offers different health insurance coverages above the basics provided by Original Medicare.
Medicaid: Medicaid is a health care assistance program that offers health care coverage for families and individuals with low incomes. This program allows people to receive a basic level of medical care by paying a small copay for doctor visits. In addition, Medicaid can include dental, vision, hearing, and prescription drug coverage, which aren’t always covered by all Medicaid plans.
Each state determines the premium amount that people will pay for their healthcare insurance policy. Each state also has the power to decide cost-sharing requirements and income requirements for Medicaid eligibility. As a result, how much money an individual makes can influence if they qualify for their state’s Medicaid program or not, in addition to how much their premium will be if they do qualify.
Medicaid is available for children and helps cover medical care for kids whose families are considered low income. Medicaid can also cover pregnant women, seniors, and others who struggle to pay for health insurance.
The Affordable Care Act of 2010 gave states an option. They could expand their Medicaid programs to cover all low-income individuals and families covered by Medicare. Many states chose to expand coverage, while other states still have the chance to do so.
Working with Medicare and Medicaid
Some people may qualify for both Medicare and Medicaid. If this is the case, both types of healthcare assistance are designed to work together to make your health coverage adequate and affordable. To qualify for Medicare, individuals need to be US citizens or be legal, permanent residents for five consecutive years.