Medicaid and Medicare each offer help for seniors to cover healthcare costs.
Medicare and Medicaid are government-run programs that help pay healthcare costs for older adults and younger people who qualify.
This article discusses the different Medicare and Medicaid options, when a person is eligible, how to enroll, and what is covered.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare is a federal health insurance plan. The plan is for people who are aged 65 or older. Some younger people with disabilities are also qualified to enroll.
There are several parts to Medicare, and a person must enroll in each part separately.
Medicare parts A and B are called original Medicare.
Private medical insurance companies approved by Medicare offer Medicare parts C and D, as well as Medicare supplementary insurance.
Medicare Part A is hospital insurance. It covers a percentage of charges for inpatient hospital admissions, hospice, some home health care, and skilled nursing facility care.
Medicare Part B is medical insurance. Part B helps pay for doctor’s office visits, medical supplies, mental health services, preventive care, and some limited prescribed medication.
Medicare Part D covers a broader range of prescription medication.
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Medicare Advantage is also known as Medicare Part C. These plans are administered by private medical insurance companies who are in contract with Medicare to provide benefits. Parts A and B are combined under one policy.
Medicare Advantage must cover all Medicare-approved services, and some companies may offer additional benefits, like vision, hearing, and dental options.
The medical insurance plans offered through private companies can include:
Medicare Part D offers prescription drug coverage.
Private medical insurance companies offer part D plans as standalone policies.
Coverage for prescription medication can be included within Medicare Advantage plans. However, a person cannot opt for a standalone policy in addition.
Medicare Part D is an optional benefit. If a person decides not to enroll when they are first eligible, a late enrollment penalty may occur.
An individual can find a prescription drug plan within their local area using Medicare’s online Find a Medicare Plan website.
Medicare plans that help pay for some out-of-pocket expenses are known as supplementary insurance or Medigap plans.
Types of out-of-pocket expenses covered may include:
Additionally, some Medigap plans cover medical treatment required when traveling outside of the United States.
Some exclusions apply to Medigap policies. The following are generally not covered:
- long-term care
- hearing aids
- vision care
- dental treatment
- private nursing
Medicaid is a government health plan administered by a person’s state.
The program must follow federal requirements. The program receives funding from both the state and the federal government.
Millions of people living in the United States are eligible for Medicaid, including:
- low-income families
- pregnant women
- older adults
- those with disabilities
Each state administers the program differently, but they all use a person’s modified adjusted gross income to determine eligibility. Other criteria include a person’s citizenship, state of residency, and immigration status.
Older adults may also qualify for other programs to help pay healthcare expenses.
Supplemental Security Income (SSI)
A person may be eligible for Supplemental Security Income (SSI). Run by the federal government, SSIs are needs-based programs. This means certain income and asset requirements apply.
Medicare has a program called Extra Help for those with limited income and resources. The program helps pay for costs associated with prescription drugs, such as premiums, deductibles, and coinsurance.
Programs of All-Inclusive Care for the Elderly (PACE) programs are available through both Medicare and Medicaid. They help people pay for health care within the community. For people who qualify for PACE, healthcare professionals work as a team to coordinate care.
To qualify, a person must have Medicare, Medicaid, or both, and live in an area where PACE is available.
A helpful tool is available for a person to find PACE plans in specific locations.
Medicaid and Medicare help seniors pay for medical and healthcare costs.
Medicare has several options to help pay for hospital stays, doctor visits, and prescription medication.
Medicaid is a state-run, income-based program that can help seniors pay for medical costs. A person must qualify under their state program rules.
Older adults may qualify for SSI, Extra Help, or PACE to help pay for medical costs.