Medicare, Medicaid, PACE, SNPs…it’s easy to confuse the alphabet soup of federal and state health programs. But, it’s important to understand what these government health services do and don’t provide, and how to access the right ones for your own, or a loved one’s needs.
What is Medicare
Medicare is the federal health insurance program for Americans 65 and older, as well as some younger people with qualifying disabilities, regardless of income. If you’ve every received a paycheck, you’ve know a portion is set aside towards the Medicare payment pool. Since Medicare is federally-run program, coverage and costs are the same regardless of where you live. If you’ve worked for at least 10 years and paid into Social Security, you can receive Medicare benefits.
Traditional Medicare consists of three basic parts:
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Part A pays for hospitalization. Most people will not pay a premium for Part A if they’ve paid into Social Security for a decade or longer, according to the National Council on Aging. If you are hospitalized, you will have to pay a deductible (the amount you’re responsible for before Medicare pays the remainder,) which is currently $1,600 per benefit period.
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Part B pays for outpatient services, such as clinic or physician office visits. You will pay a premium every month for these services (currently $164.90.). Some people may pay more depending on income. There is a $226 annual deductible and 20% coinsurance under Part B—the share you’re expected to pay after reaching your deductible.
- Part D is a separate drug coverage plan that people on traditional (fee-for-service) Medicare can opt to purchase at the time they sign up for Medicare. You can choose to purchase this plan later but may be subject to a lifetime penalty for late enrollment.
What is Medicare Advantage
Part C or Medicare Advantage is purchased through the commercial insurance market in place of traditional Medicare. All Medicare Advantage plans must provide all Part A and Part B services covered by traditional Medicare, but can impose different rules and restrictions, like which doctors you can see or require prior authorizations for certain services.
Many Medicare Advantage plans include drug coverage; some also cover additional care, such as vision or dental services. Most Medicare Advantage plans have cost sharing as well.
There are pros and cons to both traditional Medicare and Medicare Advantage plans.
To avoid possible lifetime penalties, you should enroll in Medicare or Medicare Advantage within three months before, and up to three months after, your 65th birthday. You can also purchase supplemental coverage, or “Medigap” insurance, at this time, (and up to 63 days after enrollment), with guaranteed acceptance, to help defray costs traditional Medicare doesn’t cover, according to the Medicare Rights Center. There is no out of pocket cap for traditional Medicare, so a serious illness or hospitalization could become very expensive without supplemental insurance.
What is Medicaid?
Medicaid and Medicare are different programs, but some people are covered by both. Medicaid a joint federal/state initiative that helps pay for medical costs for adults with limited income and resources, regardless of age. While all Medicaid programs have to follow certain federal guidelines, each state can set its own eligibility requirements, and determine benefits for recipients in their state.
Medicaid covers benefits that Medicare doesn’t pay for, like long-term nursing home care or personal care services to help with daily living tasks like bathing or dressing. People with Medicaid usually don’t pay out of pocket for covered medical care, but may have a small co-payment for some services, according to the U.S. Department of Health and Human Services.
Can you have both Medicare and Medicaid?
If you have both Medicare and full Medicaid coverage, you’re considered a dual eligible. Depending on your state, Medicaid may pay for certain Medicare costs, like Part B premiums, deductibles, coinsurance or copayments. You will also be enrolled in the extra help program, to defray drug costs.
Medicaid may also cover other services that Medicare does not, like certain drugs, dental visits or vision care. Dually-eligible beneficiaries may qualify for additional help with costs by enrolling in:
- Special Needs Plans
- Program of All Inclusive Care for the Elderly (PACE)
- Specific Medicare-Medicaid plans
- Other waiver programs for home and community-based care instead of nursing home care
The Centers for Medicare & Medicaid Services is the agency in charge of both Medicare and Medicaid, but you sign up for Medicare A (hospital) and Medicare B (medical) through Social Security. Part D plans are purchased separately. If it sounds confusing, you’re not alone.
Fortunately, there are places to turn to for unbiased help and advice:
- The State Health Insurance Assistance Program (SHIP) is a free service which offers trained counselors to guide those new to Medicare, as well as anyone wanting to review current benefits and options.
- Medicare Interactive, from the Medicare Rights Center, offers a wealth of resources, from enrollment basics to coordinating benefits with an existing employer plan or filing coverage appeals.
- Independent guides like the AgeWell planner from the National Council on Aging, or HealthInsurance.org
- Medicare’s guide on what to consider when choosing your coverage. You can call 1-800-MEDICARE (1-800-633-4227) to speak with a representative about your options.
