Medicare and Medicaid: What Are the Differences

MEDICARE AND

MEDICAID: WHAT ARE THE DIFFERENCES?

DEBORAH SEXTON ARKANSAS ESTATE PLANNING ATTORNEY

A Closer Look at Medicare and Medicaid – How They Are Different in Terms of

How the Programs are Run, Who Can Be Eligible for Benefits and the Limits on Those Benefits

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Medicaid and Medicare are two important healthcare programs

available to citizens of the United States. They were created when the

Social Security Act was amended in 1965 and are managed by the

Centers for Medicare and Medicaid Services. These programs

effectively extended healthcare coverage to almost all Americans age

65 or older and healthcare services to low-income children without

parental support and the relatives who take care of them, the elderly,

the blind and individuals with disabilities. Though these programs

have similar purposes, they are very different in terms of how the

programs are run, who can be eligible for benefits and the limits on

those benefits.

MEDICARE

Medicare is essentially an insurance program available to people over

the age of 65 regardless of income level, younger people who are

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disabled and patients with End-Stage Renal Disease requiring

dialysis. Through this program, patients pay a portion of the costs for

medical treatment through deductibles and monthly premiums

required for non-hospital coverage. Medicare benefits are usually

provided by private companies that contract with Medicare to provide

those benefits. Because Medicare is a federal program, it is basically

the same everywhere in the United States. Medicare has several

different parts that cover specific kinds of services:

Medicare Part A (Hospital Insurance), helps pay for care in a

hospital and skilled nursing facility, home health care and hospice

care. Most people don't have to pay for Medicare Part A because

Medicare provides the coverage. You have a choice of any doctor,

hospital or other healthcare provider that accepts Medicare. You or

your supplement insurance coverage would be responsible for

deductibles and coinsurance (or copays).

Medicare Part B (Medical Insurance), which helps pay for doctors,

outpatient hospital care and other preventive medical services. Most

people do pay for Medicare Part B. With Part B, you can also choose

any doctor, hospital or other healthcare provider that accepts

Medicare. You or your supplement insurance coverage would be

responsible for deductibles and coinsurance (or copays).



Medicare Part C (Medicare Advantage Plans) are offered by a

private company that contracts with Medicare to provide Part A and

Part B benefits. Medicare Advantage Plans include the following:

Health Maintenance Organizations,

Preferred Provider Organizations,

Private Fee-for-Service Plans,

Special Needs Plans, and

Medicare Medical Savings Account Plans

Coverage is provided by the private insurance companies that are

approved by Medicare. You are required with most plans to use

doctors, hospitals and other providers who are within the plan. You

are required to pay monthly premiums in addition to any Part B

premium that you pay, along with deductibles and copays.

Medicare Part D (prescription drug coverage) adds prescription

drug coverage to Medicare Parts A and B, some Medicare Cost Plans,

some Medicare Private-Fee-for-Service Plans and Medicare Medical

Savings Account Plans. If you want this coverage, you should join a

Medicare Prescription Drug Plan and pay the monthly premium.

These plans are run by Medicare-approved companies. Some

Medicare Advantage Plans offer prescription drug coverage. If they

do not, you can join a Medicare Prescription Drug Plan.



WHAT DO YOU DO ABOUT GAPS IN YOUR

HEALTHCARE COVERAGE?

If there are any gaps in your healthcare coverage, you can obtain what

is known as a Medicare Supplement Insurance or “Medigap” policy

through a private company. However, if you have a Medicare

Advantage Plan, you cannot use a Medigap policy to pay for any out-

of-pocket costs. In fact, if you already have a Medicare Advantage

Plan, you cannot be sold a Medigap policy.

WHO IS ELIGIBLE FOR MEDICARE?

If you are 65 years or older, a U.S. citizen or permanent resident of

the U.S., and you or your spouse have worked for at least 10 years at

Medicare-covered job, you are generally eligible for Medicare. If you

are not 65, but you have a disability or End-Stage Renal disease

requiring dialysis or a kidney transplant, you may also qualify.

MEDICAID

Medicaid is an assistance program, as opposed to an insurance

program, that serves low-income people regardless of age. Medical

bills are paid from federal, state and local tax funds and the patients

usually do not pay any of the costs for covered medical expenses. A

small co-payment is sometimes required. Medicaid is a federal-state

program, meaning that it is run by state and local governments within



federal guidelines. Therefore, the specifics of the program vary from

state to state including the rules for Medicaid eligibility.

WHO IS ELIGIBLE FOR MEDICAID?

Most states offer

coverage for adults

with children below a

certain income level,

pregnant women,

certain seniors, and

people with

disabilities. The

Affordable Care Act of

2010 established a national minimum eligibility level for Medicaid of

133% of the federal poverty level. This new level goes into effect on

January 1, 2014. So, if you were told you did not qualify for Medicaid

before, you may qualify under the new law. There are other non-

financial eligibility criteria that are used in determining Medicaid

eligibility. For example, in order to be eligible for Medicaid,

individuals need to satisfy federal and state requirements regarding

residency, immigration status, and documentation of U.S. citizenship.



WHAT MEDICAID BENEFITS ARE

AVAILABLE?

Although each State establishes and administers its own Medicaid

programs, there are

certain “mandatory

benefits” that must be

provided. These

mandatory benefits

include: inpatient

hospital services;

outpatient hospital

services; Early and

Periodic Screening,

Diagnostic, and Treatment Services; nursing facility services; home

health services; physician services; rural health clinic services;

federally qualified health center services; lab and X-ray services;

family planning; nurse midwife services; Certified Pediatric and

Family Nurse Practitioner services; freestanding birth center services;

transportation to medical care and tobacco cessation counseling,

including for pregnant women.

APPLYING FOR MEDICAID IN ARKANSAS

To apply for Medicaid, go to the Department of Human Services

(DHS) office in the Arkansas county where you live. Take the

following information about yourself and the family members who

live with you:



Proof of your age such as a birth certificate, driver's license or a birth record from the hospital

Paycheck stubs for everyone in your household who has a job

Social Security card Letters or forms from Social Security, SSI, Veteran's

Administration, or other sources that show the amount of your income

Insurance policies, including other health insurance policies

Bank books or other papers that show the amount of money or property you own

Arkansas has several Medicaid Programs: ARKids First, ConnectCare,

ElderChoices, Alternative, DDS Waiver and TEFRA. For more

information visit the Arkansas Medicaid website.

https://www.medicaid.state.ar.us/


https://www.medicaid.state.ar.us/


About the Author

Deborah K. Sexton

As the sole attorney in the Fayetteville law

firm of Deborah Sexton Law Office, Deb

oversees a practice devoted to providing

clients with the best in estate planning.

Deborah Sexton, C.P.A., J.D., L.L.M.,

combines an extensive background in

accounting with a wide range of legal

experience to provide her clients with a

uniquely practical perspective. An attorney

since 1983, she now devotes her practice

primarily to estate planning and elder law.

EXPERIENCE

After obtaining her undergraduate degree in accounting from Abilene

Christian University in Abilene, Texas, she worked in Dallas in public

accounting for several years, and then went to the University of

Arkansas Law School in Fayetteville. Upon graduating from law

school, she went on to obtain an L.L.M. degree in Taxation from New

York University.

Deborah Sexton Law Office www.arkansas-estateplanning.com 2766 Millennium Drive Fayetteville, AR 72703 Phone: (479) 443-0062 Fax: (479) 443-2001


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Medicare and Medicaid: What Are the Differences

Documents

medicare medicare

medicare benefits

c medicare advantage

hospital insurance

b benefits

supplement insurance

healthcare services

nonhospital coverage