What are Medicare and Medicaid?
Medicare and Medicaid are government-funded programs that seek to provide for the health needs of American citizens.
Medicare is a federal health insurance program, funded with your Social Security taxes, for those over 65 or with a disability. It consists of two separate parts. Part A assists with hospital care, and Part B is for doctor and outpatient costs.
Medicaid is a state-governed health insurance program. As such, its rules and coverage varies state to state. It's primary coverage is for the financially needy. It is available to those already using Medicare, and often serves to help with Medicare co-payments, deductibles, and premiums, as well as gaps in Medicare coverage. In addition to covering many of the costs Medicare doesn't, Medicaid is often available to those who don't qualify for Medicare.
Medicare Explained
What is Medicare?
Medicare is a federal health insurance program. Funded by the Social Security Administration, it helps to provide health care for those over 65 or with a disability.
How can I enroll?
If you're already getting Social Security benefits, you'll be automatically enrolled for Parts A and B when you reach 65. If you're getting Social Security disability benefits, you'll be automatically enrolled for Parts A and B after 24 months. Otherwise, assuming you're eligible, you can enroll for one or both Parts by calling 1-800-772-1213, or by visiting your local Social Security Office.
How do I know if I'm eligible?
If you're over 65 and a legal 5-year resident of the United States, you're eligible for Medicare. Or, if you're a legal 5-year resident and qualified to receive Social Security disability benefits, you are eligible for Medicare.
How's Medicare work?
When you're enrolled in Medicare, the billing process is simple. When you visit a Medicare provider, they will bill Medicare directly for the coverage of the services they provide. If the service was performed under Part B, you will also receive a Medicare Summary Notice (MSN) detailing the charges the provider is billing to Medicare. This gives you a chance to review the charges resulting from your visit.
Medicare: Part A
What is Part A of Medicare?
Part A is the Medicare Plan covering hospital and hospital follow up costs.
What is covered under Part A?
Part A coverage is dependent on what Medicare defines as a "benefit period". A benefit period is a treatment period defined by the beginning of patient treatment in a facility until the patient is out of the facility for 60 consecutive days.
Coverage also varies depending on the type of facility. Stays at a hospital are fairly well covered, with Medicare covering most of the basics. A skilled nursing facility also has the basics covered, as long as it's follow up to at least a 3-day related hospital stay. Likewise, Part A will cover a psychiatric hospital for up to 190 days in a lifetime, part-time or intermittent home skilled care, or even hospice care, including respite care and drug needs.
How much does Part A cost?
If either you or your spouse has paid into Social Security for at least 10 years, then there is usually no premium for Medicare Part A.
If you don't meet that qualification, however there is a monthly premium for Medicare Part A of approximately $343.00. In addition, if you will have to enroll in Plan B, which carries it's own premium.
Regardless of whether you have to pay the premium, there is a deductible for care under Part A. The deductible is $876 for the first 60 days of the benefit period in a hospital, or the first 20 days of the benefit period in a skilled care facility.
After those time periods (60 days for hospital, 20 for a skilled care facility), there begin to be large co-payments for extended stays. These co-payments vary, depending on the type of facility and length of stay.
Medicare: Part B
What is Part B of Medicare?
Part B is the Medicare Plan covering doctor bills and outpatient costs.
What is covered under Part B?
Part B covers very specific areas in health care. In general, it will cover 80% of the "approved charges" in these areas. An approved charge is not necessarily the amount billed by the service provider, but is actually the charge that Medicare decides is appropriate.
Some of the main categories of coverage are:
- Doctor's services
- Some Outpatient services, skilled care & therapies, and supplies
- Some Home Health Care services, skilled care & therapies, and supplies
- Diagnostic tests
- Some ambulatory surgery center facility fees
- Medical equipment & supplies (wheelchairs, hospital beds, oxygen, walkers, etc. as well as prosthetics, pacemakers, splints & casts, etc )
- Second surgical opinions
- Outpatient mental health care
- Clinical Laboratory Services (blood tests, urinalysis, etc )
- Ambulance Services when necessary
- Emergency Care
- Eyeglasses after cataract surgery
- Some Chiropractic services
- More…
In addition, Medicare Part B will cover 100% of approved charges for some other healthcare services, such as home health care, clinical laboratory services, and flu and pneumonia vaccines.
Medicare Part B does not cover some other major medical expenses, however, such as regular physical examinations, glasses, dentures, medical prescriptions, hearing aids, and other major medical expenses.
How much does Part B cost?
Part B of Medicare has a monthly premium of $66.60. For every year after eligibility that a person does not enroll, however, the premium could increase for that person another 10%.
In addition to the premium, there is a $100 deductible once a year. The co-payments for Part B are usually 20% of approved charges, although they can vary to 50% of outpatient mental health care or even 0% of certain treatments and medical providers.
Finally, because Medicare Part B only pays for approved charges, or what they feel the service should cost; doctors can charge you for the difference in their billing and Medicare Part B's approved charges.
Medicaid
What is Medicaid?
Medicaid ( Medi-Cal in California ) is a Health Insurance Program managed by each of the 50 states. Because it is governed by the state, its coverage, rules, payment requirements, and eligibility restrictions vary from state to state. There are certain guidelines, however, that it must follow to receive matching funding from the Federal Government for its programs.
Medicaid is targeted to low-income and financially needy families and individuals. It can be carried in addition to Medicare, and is often used to cover Medicare gaps in coverage, as well as costs of premiums, co-payments, and deductibles.
How does Medicaid work?
In general, healthcare providers bill Medicaid directly, and Medicaid payments are made directly to the service-providers. State Medicaid programs pay an accepted rate for the service, rather than what care providers would like to bill. Unlike Medicare Part B, however, healthcare providers are legally prevented from billing the patient for the difference in payment. The States have broad discretion in determining the appropriate rates for services, except in certain cases. Also, institutional service rates cannot be more than allowed by Medicare.
Who is eligible for Medicaid?
Eligibility for Medicaid varies from state to state, generally based on things like age, pregnancy, disability, blindness, income, resources, and citizenship. In general however, Medicaid programs focus on the financially needy US citizens of children, teenagers, pregnant women, families with children, the aged, the disabled, and the blind.
What does Medicaid Cover?
While coverage and programs vary from State to State, in order to receive matching federal funds States must meet certain guidelines in coverage. Many State Medicaid programs meet most basic medical needs, as well as much of the coverage not included under Medicare.
What does Medicaid Cost?
States have discretion in determining premiums, co-payments, and deductibles. They are prohibited from charging for certain services, however, such as:
- Emergency Services
- Family planning services
- Pregnant women
- Children under 18
- Hospital or nursing home patients who are contributing the majority of their income to the facilities they reside in
- Categorically needy HMO enrollees