Medicare and Medicaid Author:    Posted under: Health InsuranceHealth Insurance Types


Medicare and Medicaid are two governmental programs providing health-related and medical services to distinct groups of people in the United States. They were both formed when President Lyndon B. Johnson signed amendments to the Social Security Act on July 30, 1965 and are also both managed by a division of the U.S. Department of Health and Human Services called the Centers for Medicare and Medicaid Services (CMS), but that is where the similarities end.

What is Medicare?

Medicare is a federally-governed social insurance program providing hospital and medical care for the elderly and certain disabled members of the general population.

The program consists of two divisions for hospital and medical insurance, Part A and Part B, and two divisions providing flexibility and prescription drugs, Part C and Part D.

Medicare Part A also known as Hospital Insurance (HI)

There are many inclusions in this division, such as:

  • Financial assistance during hospital stays, including supplies, meals, a private room and tests.
  • Funding for home health care that is provided on a part-time basis as is medically necessary. These services are physical, occupational and speech therapy.
  • Monetary support for nursing facility care
  • Medical equipment for those in their advanced years and disabled, such as wheelchairs and walkers

The inclusions in Part A are generally available without the need to pay for monthly premiums since these costs are covered by payroll taxes.

Medicare Part B also known as Supplementary Medical Insurance (SMI)

Part B helps pay for medical needs by a member, such as:

  • Doctor visits for check-ups
  • Outpatient hospital visits
  • Home health care
  • Blood transfusions
  • In some cases, ambulance transportation
  • Chemotherapy
  • Physician and nursing services
  • Renal dialysis
  • Immunosuppressive drugs after an organ transplant
  • Durable medical equipment such as walkers, wheelchairs, canes, etc.
  • Certain hormonal treatments
  • X-rays, laboratory and diagnostic tests
  • Prosthetic devices and eyeglasses
  • Certain vaccinations

Unlike Part A, Part B requires a monthly premium and annual deductible is required prior to the start of coverage.

Medicare Part C also known as Medicare + Choice or Medicare Advantage Plans

This part permits members to devise a customized plan to meet their needs more suitably. This would entail purchasing supplemental insurance from private health coverage providers which will provide additional services through which all Medicare services offered by Part A and Part B can be obtained.

Medicare Part D

This pertains to coverage for prescription drugs.

Who is eligible for Medicare?

To become eligible for Medicare, one must be:

  • A U.S. citizen or a permanent legal resident for no less than five years
  • Eligible for Social Security benefits and has been a contributor to the system for a minimum of ten years
  • Either at least 65 years old or under 65 and disabled
  • Any age with End-Stage Renal Disease

What is Medicaid?

Medicaid is a social welfare health and medical services program for low income individuals and families.  Although the supervision of the program is at the federal level, each state institutes their own standards for eligibility, regulates the services (including the types, amount, duration and scope), determines the equivalent rate for services and manages its own Medicaid program.

Services available through Medicaid vary by state, but when medically necessary, the federal government requires coverage for the following:

  • Hospital services (inpatient and outpatient)
  • Family planning
  • Prenatal care
  • Midwife services
  • Pediatric and family nurse practitioner services
  • Laboratory and X-ray services
  • Early and periodic screening, diagnostic, and treatment (EPSDT) services for children under age 21
  • Nursing facility services for people aged 21 or older
  • Medical and surgical dental services
  • Physician services
  • Home healthcare for people eligible for nursing facility services
  • Rural health clinic services
  • Vaccines for children

Each state also has the option to add other benefits that include but are not limited to:

  • Optometrist services and eyeglasses
  • Rehabilitation and physical therapy
  • Prosthetic devices
  • Medical transportation services
  • Dental services
  • Prescription drugs

Members of Medicaid get these for free under their coverage.

Who is eligible for Medicaid?

Eligibility guidelines differ from state to state, and although the program is aimed at helping people who belong in the low-income bracket, qualification may also depend on other factors such as age, pregnancy status, citizenship and disability status and caretakers of the disabled, elderly and children.

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