Understanding The Difference Between Medicare And Medicaid

Many people are unclear on the differences between Medicare and Medicaid.

In fact, many people mistakenly think Medicare and Medicaid are one and the same or at least somehow related.

The two programs are only related in that they are both federal programs. However, unlike Medicare, Medicaid is a joint federal and state program. It is my intention here to clear up any confusion that you may have about the two programs.

Medicare and Medicaid: Medicare

Let’s start with Medicare. This is the program that all employees and employers pay into during their working life. I like to explain Medicare by remembering to focus on the “care” part of the word. That’s because Medicare is federal health insurance for anyone age 65 and older. It is the program that basically makes sure those 65 and older have insurance that gives them access to mainstream healthcare services, while simultaneously substantially reducing the financial burdens older Americans so often face. Medicare-related bills are paid from two trust funds held by the U.S. Treasury. Different sources (including payroll taxes and funds that Congress authorizes) fund the trust funds. People with Medicare pay part of the costs through things like monthly premiums for medical and drug coverage, deductibles, and coinsurance.

Some people who are not yet 65 years of age may qualify and be able to get Medicare. Those who qualify for early Medicare are those with a disability, End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant), or ALS (also called Lou Gehrig’s disease).

You can find out more about Medicare by visiting Medicare.gov.

Medicare and Medicaid: Medicaid

When thinking of Medicaid, again, turn your attention to the last part of the word: aid. Medicaid is a program that aids in helping to cover medical costs for some people with limited income and resources. As I mentioned above, Medicaid is a joint federal and state program. While the federal government has general rules that all state Medicaid programs must follow, each state runs its own program. This means eligibility requirements and benefits can vary from state to state.

Medicaid offers benefits that Medicare doesn’t normally cover, like nursing home care and personal care services. People with Medicaid usually don’t pay anything for covered medical expenses but may owe a small co-payment for some items or services.

You May Qualify For Both Medicare And Medicaid

Some people qualify for both Medicare and Medicaid and are called “dual eligibles.” If you have Medicare and full Medicaid coverage, most of your health care costs are likely covered. You can get your Medicare coverage through Original Medicare or a Medicare Advantage Plan. Eligibility levels differ for parents and for single adults. Very often when we create estate plans for our clients, we can get some of our clients approved for Medicaid, which as I mentioned pays for nursing home and personal care services. If you would like to explore how an estate plan might be able to help you with your long-term healthcare, give my office a call at (470) 235-7868. Very often this combination of Medicare and Medicaid takes the burden of care off of adult children. Give us a call and let’s see how we can help you.

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!