What is the difference between Medicare and Medicaid?

As a nurse practitioner, you will frequently encounter underserved populations. The government-funded Medicare and Medicaid programs play a crucial role in providing healthcare coverage to those populations. Therefore, it is essential to understand the differences between them. Although both programs are overseen by the Centers for Medicare and Medicaid Services (CMS) and help cover healthcare costs, their eligibility criteria, target demographic, costs, and coverage specifics differ substantially. In today's blog post, Mrs. Cohen will explain everything you need to know about the differences between Medicare and Medicaid for success on your board exams and nursing career.

What do they have in common?

• Both programs are funded and sponsored by the U.S. government and designed to help people with limited financial resources access the medical care they need.
• Both were established in 1965.
• Both programs have rules about medical services coverage.
• Individuals can have both if eligible.

What is Medicare?¹

Medicare is a federal program that provides health coverage to U.S. citizens or permanent legal residents 65 or older who have worked and paid into the system via payroll taxes. It also serves people of any age with End-Stage Renal Disease (permanent kidney failure) and individuals younger than 65 who are disabled and meet specific criteria. Medicare consists of multiple parts, each covering different aspects of healthcare:

• Part A, Hospital Insurance, covers inpatient hospital stays, skilled nursing facility care, and hospice care.
• Part B, Medical Insurance, covers services from doctors and other health care providers, outpatient care, home health care, durable medical equipment, and preventive services such as screenings and flu shots.
• Part C, aka Medicare Advantage Plan, includes all benefits and services covered under Parts A and B. It usually includes Medicare prescription drug coverage (Part D) and may include extra benefits such as vision, dental, and hearing at an additional cost.
• Part D: This part adds prescription drug coverage to existing Medicare coverage.

What is Medicaid?²

“Medicaid provides health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. Medicaid is administered by states, according to federal requirements. The program is funded jointly by states and the federal government.”

— medicaid.gov/medicaid/index.html

Medicaid beneficiaries usually incur no costs except small co-payments for some services. For a state-by-state breakdown of eligibility requirements, visit medicaid.gov.

Medicare vs. Medicaid:

Key differences Now that we've gotten a general overview of these two programs, let's delve into their differences in more detail.

1. Eligibility:
   • Medicare³: Age is the main factor (65 years or older), but it can also be determined by medical condition. Eligibility criteria are generally universal across the United States.
   • Medicaid⁴: Based on income level, and can vary significantly from state to state due to different state-level policies.
2. Costs:
   • Medicare⁵: Costs – such as monthly premiums and deductibles – are standardized at the federal level but can depend on factors like years worked, income level, whether premiums for Part B or Part D are deducted, etc. Some parts of Medicare are premium-free, while others aren't.
   • Medicaid⁶: Often provides free or low-cost care. Some states may charge a minuscule co-payment.
3. Coverage:
   • Medicare: Coverage is standardized nationwide; most plans offer nationwide coverage.
   • Medicaid: Coverage varies from state to state, and the program may not cover out-of-state treatment unless it's an emergency.
4. Enrollment:
   • Medicare⁷: The initial enrollment period lasts 7 months, starting 3 months before turning 65.
   • Medicaid: Rules and dates vary by state.
5. Funding:
   • Medicare⁸: Funded by payroll taxes through the Medicare Trust Fund.
   • Medicaid⁹: Funded jointly by the federal and state governments, with the former funding at least 50%.

Questions time…

Nurse Practitioners' board exams may ask questions such as the ones below. Given what you learned so far, think about the answer, then read along to find out if you are correct.

Who is eligible for both Medicare and Medicaid?

Answer: Individuals eligible for Medicare and Medicaid are often referred to as "dual eligibles" and can receive benefits from both programs simultaneously. Generally, to qualify for both Medicare and Medicaid, a person must meet the following criteria:

1. Medicare Eligibility:
   • Age 65 or older.
   • Younger than 65 with a qualifying disability.
   • Any age with End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS).
2. Medicaid Eligibility:
   • Low income and limited resources. Medicaid eligibility varies by state, as each state has income and asset limits.
   • Meets specific criteria set by their state, including age, pregnancy, disability, blindness, income, resources, and being a U.S. citizen or a lawfully admitted immigrant.

What does Medicaid not cover?

While Medicaid coverage can vary by state, as each state has some latitude in determining what services to cover, there are certain types of services that Medicaid generally does not cover¹⁰:

• Cosmetic Surgery.
• Certain Dental Services: Adult dental services are optional for states, and coverage varies widely. Some states offer comprehensive dental care, while others provide limited or no coverage.
• Private Room in Hospitals: Unless medically necessary, the cost of a private room in a hospital is not covered.
• Hearing Aids and Related Exams for adults.
• Certain Vision Services: Medicaid coverage for eyeglasses and routine eye exams for adults is optional for states. Some states offer comprehensive vision coverage, while others may offer limited or no coverage.
• Certain Prescription Drugs: While Medicaid covers a broad range of prescription drugs, there may be certain drugs that are not covered, require prior authorization, or have limitations.
• Infertility Treatments: Most states do not cover treatments for infertility under Medicaid.
• Alternative Therapies: Treatments such as acupuncture, chiropractic services, and other alternative therapies are not universally covered and depend on the state.
• Non-Emergency Medical Transportation (NEMT): While many states provide NEMT services for Medicaid recipients, they're not universally available.
• Over-the-counter Medications: not covered unless prescribed by a healthcare provider.
• Long-Term Custodial Care: Medicaid covers long-term care services, but it typically does not cover long-term custodial care (like assistance with daily living activities) unless it is part of a broader plan of care.

Is Medicaid state or federal?

Given what we've discussed so far, you should understand that the Federal and State governments jointly run Medicaid. It operates as a partnership between them with separate roles.

1. Federal Role:
   • The federal government sets basic guidelines for Medicaid, including minimum standards for eligibility, services, and financial contributions.
   • It provides a significant portion of the funding for each state's Medicaid program. The federal share of Medicaid funding varies by state and is determined by the Federal Medical Assistance Percentage (FMAP), which is based on the state's per capita income relative to the national average. States with lower per capita incomes receive a higher federal matching rate.

2. State Role:
   • Each state administers its own Medicaid program within the federal guidelines. States have some flexibility in determining certain aspects of their programs, such as eligibility criteria, the scope of services covered, and the amount, duration, and scope of services.
   • States must contribute funds to their Medicaid programs to receive federal matching funds.

To sum it up, Medicare and Medicaid are fundamentally different programs, each serving distinct demographics. While Medicare is available to seniors and individuals with disabilities, Medicaid aims to help a broader range of people who cannot afford health care.

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Sources:

1. “What’s Medicare?” Medicare, www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare. Accessed 23 Dec. 2023. 

2. “What Is Medicaid.” Medicaid, www.medicaid.gov/medicaid/index.html. Accessed 23 Dec. 2023. 

3. “Get Started with Medicare.” Medicare, www.medicare.gov/basics/get-started-with-medicare. Accessed 23 Dec. 2023. 

4. “Medicaid Eligibility.” Medicaid, www.medicaid.gov/medicaid/eligibility/index.html. Accessed 23 Dec. 2023. 

5. “Medicare Costs.” Medicare, www.medicare.gov/basics/costs/medicare-costs. Accessed 23 Dec. 2023. 

6. “Medicaid Costs.” Medicaid, www.medicaid.gov/medicaid/cost-sharing/cost-sharing-out-pocket-costs/index.html. Accessed 23 Dec. 2023. 

7. “When Does Medicare Coverage Start?” Medicare, www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start. Accessed 23 Dec. 2023. 

8. “How Is Medicare Funded?” Medicare, www.medicare.gov/about-us/how-is-medicare-funded. Accessed 23 Dec. 2023. 

9. “Medicaid Financial Management.” Medicaid, www.medicaid.gov/medicaid/financial-management/index.html. Accessed 23 Dec. 2023. 

10. “Mandatory & Optional Medicaid Benefits.” Medicaid, www.medicaid.gov/medicaid/benefits/mandatory-optional-medicaid-benefits/index.html. Accessed 23 Dec. 2023. 

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