Medicaid is a comprehensive insurance program that serves those with very limited means and specific situations, including those 65 and over, children, pregnant women and the disabled. Medicare is a federally funded health insurance for those 65 and over. Medicare supplement plans and Medicare Advantage plans help cover out-of-pocket costs in Medicare. Medicare and Medicaid are different programs, but with similar goals: to make sure that vulnerable members of our society have access to health care. Medicare and Medicaid can work separately or together, ensuring the lowest possible out-of-pocket costs.
According to AARP, Medicaid is the largest health insurer in the United States, public or private, and was started in 1965. To qualify for Medicaid, you have to fit a federally recognized category (low income pregnant women, low income caregivers of dependent children, low income people over 65 and low-income people with a qualifying disability). You also have to meet income and asset standards.
Medicare is a health insurance for those 65 and over, and for those who qualify through a disability. Medicare is federally funded through contributions made while we're working. Part A covers hospital care, Part B covers doctors services and durable medical equipment and Part D covers prescriptions. Anyone who is 65 or over can qualify for Medicare; no income requirement exists. You may, however, pay a higher monthly premium for Part B depending on your income level.
Medicare Supplements and Medicaid
Medicare has significant gaps. If you're hospitalized, for example, the coinsurance is $1,000 or more. Medicare Supplements are federally regulated plans that help fill those gaps, plus provide additional benefits like Foreign Emergency coverage. If you are on Medicaid, you don't need a Medicare Supplement; in fact, it's illegal to sell you one. If you are on Medicare and have a Medicare Supplement, then qualify for Medicaid, your Medicare Supplement can be put on hold for up to 24 months. If your situation changes during that time and you're no longer on Medicaid, you can reinstate your plan with no penalty or underwriting. After 24 months, you would have to re-apply for coverage.
Medicare Advantage Plans and Medicaid
Medicare Advantage plans are different from Medicare Supplements. They pay in place of Medicare, although you keep all your Medicare rights and have lower co-pays and deductibles. As part of the Medicare Modernization Act of 2003, Congress introduced Special Needs Plans, or SNPs. These plans are specifically designed for Dual Eligibles (those with both Medicare and Medicaid). The advantage of a Medicare Advantage SNP is the level of coordination; you're dealing with one plan (the SNP) rather than two (Medicare and Medicaid). These plans usually have networks; if you're considering a SNP, check with your primary doctor to make sure you're still covered.