Medicaid vs. Medicare

Medicaid
Medicare

While Medicare is a federal government-sponsored healthcare program primarily for seniors, Medicaid is for low-income families and is managed by both the state and federal governments. Medicare and Medicaid differ in terms of who they cover, how they are funded and governed.

The Dept. of Health & Human Services website explains:

Medicare is an insurance program. Medical bills are paid from trust funds which those covered have paid into. It serves people over 65 primarily, whatever their income; and serves younger disabled people and dialysis patients. Patients pay part of costs through deductibles for hospital and other costs. Small monthly premiums are required for non-hospital coverage. Medicare is a federal program. It is basically the same everywhere in the United States and is run by the Centers for Medicare & Medicaid Services, an agency of the federal government.
Medicaid is an assistance program. Medical bills are paid from federal, state and local tax funds. It serves low-income people of every age. Patients usually pay no part of costs for covered medical expenses. A small co-payment is sometimes required. Medicaid is a federal-state program. It varies from state to state. It is run by state and local governments within federal guidelines.

Comparison chart

Medicaid

Medicare

Overview U.S government sponsored program for low-income individuals and families to pay the cost of health care. U.S government sponsored health care program for people above 65 years of age, people under 65 with certain disabilities and all people with end stage renal disease.
Beneficiaries Medicaid beneficiaries are low income families and individuals. Medicare beneficiaries are senior citizens over the age of 65, end stage renal disease, and disabled eligible to receive social security benefits.
Eligibility criteria Candidates are means-tested. Criteria are very strict and vary from state to state. Beneficiaries must have less than $1,000 in liquid assets. The income restriction also varies; in NY those earning less than $700 a month are eligible. Available to all U.S citizens above the age of 65 irrespective of income, providing that he or she paid taxes into the Social Security fund.
Variation in coverage Program is run by individual states so the type of coverage and policies may vary between states. Federally run so the program and coverage is uniform throughout the country.
Payments In some states Medicaid beneficiaries are required to pay the provider a small fee (co-payment) of up to $30 per month for medical services. May require payment of deductibles and co-pay for certain services provided. May require payment of deductibles and co-pay for certain services provided., Medicare reserves the right to refuse to pay for treatments it deems unnecessary.
Funding Usually 50% federal contribution and 50% state-sponsored. Federal government may contribute less in wealthier states. Federal government sponsored.
Population covered Medicaid payments currently assist nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States. In 2007 about 44 million (15% of the population) benefited from Medicare.
Coverage Covers a wider range than Medicare: hospitalization; X-rays; laboratory services; midwife services; clinic treatment; pediatric care; family planning; nursing services and in-home nursing facilities for adults; medical and surgical dental care. Divided into Part A, which covers hospital care; Part B, which covers medical insurance; and Part D, which covers prescription drugs.
Budgetary expense Medicaid accounted for 16.8% of the budget of states and 7% of the federal budget. The federal government pays on average 57 percent of Medicaid expenses. Medicare accounted for 13% of the federal budget.

Contents: Medicaid vs Medicare

Eligibility

Medicare is available to all U.S citizens above the age of 65 irrespective of income, providing that he or she paid taxes into the Social Security fund. People under 65 with certain disabilities and all people with end stage renal disease are also covered by Medicare.

Medicaid has strict eligibility criteria where candidates are means-tested and criteria vary from state to state. Beneficiaries of the program must have less than $1,000 in liquid assets. The income restriction also varies, for example in New York those earning less than $700 a month are eligible. However, poverty is not the only eligibility criteria. For example, children living with guardians can avail of Medicaid.

Dual Eligibility

Some Medicare beneficiaries are dual eligible, i.e,. they also qualify for certain Medicaid benefits on account of their limited income. Based on their income and its relation to the Federal Poverty Line (FPL), they may be eligible for full Medicaid benefits or limited benefits. This booklet from CMS explains the coverage options for dual eligible individuals.

Population covered

In 2002 around 39.9 million people were eligible for and used Medicaid services. Medicaid payments currently assist nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States. About half of Medicaid recipients are children; an additional 25 percent are elderly or disabled people. The Federal Government pays on average 57 percent of Medicaid expenses. More than half the AIDS population is on Medicaid. In 2007 about 44 million or 15% of the population benefited from Medicare.

Funding

Medicare is a federal government sponsored program whereas Medicaid is part federal and part state sponsored program with states running the delivery of the program. 50% contribution usually comes from federal contribution and 50% is state sponsored although the federal government may contribute less in wealthier states.

Coverage

Medicare is divided into package A (hospital check-up coverage), B (Out-Patient coverage) and D which covers prescription drugs. Medicaid is divided in to either financial need or medical need. Medicare covers for at most a hundred days worth of stay in a nursing home facility whereas Medicaid can shoulder prolonged accommodations.

Variation

Since Medicare is federally run the program and coverage is uniform throughout the country. As Medicaid is a program run by individual states the type of coverage and policies may vary between states.

Payments due

In some states Medicaid beneficiaries are required to pay a small fee (co-payment) for medical services which can be up to $30 per month to the care provider. Medicare beneficiaries may be required to pay deductibles and co-pay for certain services provided by Medicare, and Medicare also reserves the right to refuse to pay for treatments it does not deem necessary. In 2008, a new federal rule was passed that allows states to charge premiums and higher co-payments to Medicaid participants. This rule will enable states to take in greater revenues, limiting financial losses associated with the program. Estimates figure that states will save $1.1 billion while the federal government will save nearly $1.4 billion. However, this means that the burden of financial responsibility will be placed on 13 million Medicaid recipients who will face a $1.3 billion increase in co-payments over 5 years.

Budgetary expenses

Medicare accounts for about 13% of the federal budget. Medicaid accounts for 16.8% of the budget of states and 7% of the federal budget. The federal government pays on average 57 percent of Medicaid expenses. There are serious concerns that the U.S government will not be able to afford the Medicare or Medicaid programs in the future. For Medicare the fundamental problem is that as the baby-boomer generation retires the ratio of working to retire people means that the latter can not be supported by the tax contributions of the former. There will be 2.4 workers supporting every retired individual. This is coupled with the rising cost of medical care.

References

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