Medicaid vs. Medicare
Medicaid vs. Medicare
What's the Difference and Why It Matters?
These two programs sound similar, but they serve very different purposes. Understanding the difference can significantly impact your healthcare coverage, costs, and long-term planning.
What Is Medicaid?
Medicaid is a needs-based health coverage program designed to help individuals and families with lower income and limited assets. Unlike Medicare, Medicaid eligibility is based primarily on income, assets (also called resources), overall financial need, and in some cases, medical necessity. Medicaid is income and asset-based. Since Medicaid is jointly funded by the federal government and the states, specific income and asset limits vary depending on where you live.
How Medicaid Eligibility Works
- Monthly income
- Countable assets such as bank accounts and certain investments
- In some programs, medical need
- For long-term care Medicaid, strict asset/resource limits often apply. Certain items may be exempt, but eligibility remains financially based. Medicaid functions as a financial safety-net program.
What Does Medicaid Cover?
- Doctor visits
- Hospital services
- Prescription medications
- Preventive care
- Behavioral and mental health services
- Nursing home care
- In many states, certain in-home care or community-based support services
What Is Medicare?
Medicare is federal health insurance primarily for people age 65 and older and certain individuals under 65 with qualifying disabilities. Medicare eligibility is not based on income or assets. Medicare is age and disability-based.
What Does Medicare Cover?
- Part A – Hospital coverage
- Part B – Doctor and outpatient medical coverage
- Part C – Medicare Advantage Plans (Optional)
- Part D – Prescription drug coverage (Optional)
- Medicare Supplemental Plans AKA Medigap Plan (Optional)
- Hospital stays
- Doctor visits
- Surgeries
- Preventive services
- Short-term skilled nursing or rehabilitation
Medicare generally does not cover long-term custodial nursing home care. It typically involves premiums, deductibles, copays, and coinsurance. Medicare is insurance coverage, not a financial assistance program.
What Is the Difference?
Medicare is based on age or disability, is available at 65 regardless of wealth, and is a Federal program. There is no asset test. It provides limited long-term care. Premiums and cost-sharing apply.
Medicaid is based on income and assets. It is designed for individuals with lower income and limited resources. It is a Federal and state program. Assets and resource limits apply. It covers long-term care if eligible. Often it has minimal cost-sharing.
Need Help Understanding Where You Stand?
Lighthouse Medicare Solutions can help you walk through your situation step by step and understand your options in a clear, simple, and transparent manner. If you qualify for Medicaid, we can also help with the application process.
We will provide you with clear guidance and simple to follow explanations.