Staying Fit
They may sound alike and are spelled similarly but Medicare and Medicaid are two very different entities. Both are government health insurance programs established July 30, 1965, when President Lyndon B. Johnson signed the Medicare and Medicaid Act— also known as the Social Security Amendments of 1965 — into law.
Medicare is a health insurance program for older Americans, while Medicaid provides health insurance for people with limited incomes. Eligibility and coverage for both programs have expanded since they began.
Medicare covers medical expenses for more than 66 million Americans age 65 and older as well as younger people who qualify because of a disability. Medicare eligibility is not based on income or assets and you can’t be denied coverage or charged more because of preexisting medical conditions.
Medicaid is run jointly by federal and state governments to provide health care and long-term care coverage for more than 81 million Americans, including children, parents, low-income adults, older adults and people with disabilities. The government sets general standards for Medicaid, but specific eligibility requirements and coverage details vary by state. Your income must fall below certain levels to qualify.
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What does Medicare cover?
Medicare covers any doctor or hospital in the United States that participates in the Medicare program, which encompasses a vast majority of providers. Also known as original Medicare or traditional Medicare, this coverage has two parts: Part A and Part B.
- Medicare Part A helps pay for inpatient stays in hospitals and skilled nursing facilities, some home care and end-of-life hospice care.
- Medicare Part B covers doctors’ services, diagnostic screenings, lab tests, preventive services, outpatient care, plus some medical equipment and transportation.
Medicare doesn’t cover everything. Many people with original Medicare choose to buy a Medicare supplement policy, also known as Medigap, to help cover deductibles and copayments.
And Medicare doesn’t automatically cover medications, but you can buy a Part D prescription drug policy from a private insurance company to help cover those costs.
Another coverage option: Some people choose to get coverage from a private Medicare Advantage plan, also known as Part C, rather than original Medicare. These plans must provide at least the same coverage as Medicare Part A and Part B, but they may have different deductibles and copayments, and they usually have provider networks. They may also provide additional coverage for prescription drugs and some dental, hearing and vision care.
Who is eligible for Medicare?
You can qualify for Medicare coverage in two ways:
- At age 65 if you’re a U.S. citizen or permanent legal resident who has lived in the United States for at least five years.
- If you’re younger then 65, have a disability and have received Social Security Disability Insurance (SSDI) benefits for at least 24 months. People with Lou Gehrig’s disease, also known as amyotrophic lateral sclerosis (ALS) or permanent kidney failure, known as end-stage renal disease (ESRD), may qualify earlier.
How much does Medicare cost?
Most people won’t pay Part A premiums because you or your spouse paid Medicare payroll taxes when working for at least 40 calendar quarters (10 years). But you’ll pay Part B premiums, typically $174.70 a month in 2024, unless your income is high, which means you’ll pay more.
More on Medicare
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Get to know the program basics before an emergency occurs