ALTHOUGH THEY WERE BORN ON THE SAME DAY, Medicare and Medicaid are not identical twins. And even though they have been around for 55 years, many people still confuse these government-backed two healthcare programs.
On July 30, 1965, President Lyndon Johnson signed the laws that created Medicare and Medicaid as part of his Great Society programs to address poverty, inequality, hunger and education issues. Both Medicare and Medicaid offer health care support, but they do so in very different ways and mostly to different constituencies.
According to the Medicare Rights Center:
- Medicare is a federal program that provides health coverage to those age 65 and older, or to those under 65 who have a disability, with no regard to personal income.
- Medicaid is a combined state and federal program that provides health coverage to those who have a very low income, regardless of age.
Some people may be eligible for both Medicare and Medicaid, known as dually eligible, and can qualify for both programs. The two programs work together to provide health coverage and lower costs, the MRC says. And although Medicare and Medicaid are both health insurance programs administered by the government, there are differences in the services they cover and in the ways costs are shared.
Medicare is a federal health insurance program. According to the Department of Health and Human Services, the program pays medical bills from trust funds that working people have paid into during their employment. It offers essentially the same coverage and costs everywhere in the United States and is overseen by the Centers for Medicare & Medicaid Services (CMS), an agency of the federal government.
Medicare is designed primarily to serve people over 65, whatever their income, and younger disabled people and dialysis patients who are diagnosed with end-stage renal disease (permanent kidney failure requiring dialysis or transplant). Patients pay a portion of their medical costs through deductibles for hospital and other services. They also pay small monthly premiums for non-hospital coverage.
Medicare has two parts. Part A covers hospital care, and Part B covers other services like doctor’s appointments, outpatient treatment and other medical expenses. HHS says you are eligible for premium-free Part A if you are age 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years. You can get Part A at age 65 without having to pay premiums if: