Although Medicaid and Medicare are both public health insurance programs, they have important differences.
Medicare is a federal program for the elderly, disabled, and individuals with end-stage renal failure. Medicaid is federal-state assistance for those with limited income.
History of Medicaid and Medicare
Congress amended the Social Security Act in 1965, creating health care programs for the elderly and those receiving public assistance.
- To provide health care assistance to low-income people, Title XIX created Medicaid.
- Title XVII established Medicare, the public health insurance for people age 65 and older.In 1973, the legislature expanded the scope of Medicare to help individuals with disabilities and kidney disease.
The roles of state and federal government
According to the US Department of Health and Human Services, states and the federal government play different roles in administering Medicare and Medicaid..
Medicare
Medicare is a federal program administered by the Centers for Medicare and Medicaid Services, so it is consistent across states.
Funding for Medicare comes from general federal revenues, payroll tax revenues, and user premiums.
Medicaid
Although the federal government sets the general rules for Medicaid, states administer the program, leading to variation across states. For Medicaid, states can establish different eligibility criteria within federal guidelines.
States and the federal government jointly subsidize Medicaid at Medicaid.gov. Federal Medicaid percentages determine how much money the federal government will match with each state for Medicaid support.
Eligibility for Medicare
Generally, after paying income taxes for 10 years, a person and their spouse can enroll in Medicare when they turn 65.
Eligible disabled people do not need to wait until retirement age to enroll in Medicare. For example, people who qualify for Social Security disability insurance can get Medicare after a two-year waiting period. People with end-stage renal disease can get Medicare at any age if they, their spouse, or a dependent child make the required amount.
Eligibility for Medicaid
Medicaid primarily benefits people with limited incomes. As states administer Medicaid, enrollment requirements may vary by state. Review eligibility requirements for your state using Medicaid.gov’s state overview feature.
As the Kaiser Family Foundation explains, there are several paths to Medicaid. States must allow low-income parents, children, and pregnant women to qualify for Medicaid if their income is below certain thresholds. This limit is calculated using the Modified Gross Income (MAGI) method. People who received foster care as children can get Medicaid regardless of income.
Eligibility stems from enrollment in other programs, such as Supplemental Security Income or the Breast and Cervical Cancer Treatment and Prevention Program. States can allow the elderly and disabled to qualify for Medicaid by imposing both income and asset limits.
In some states, those with medical expenses may qualify for Medicaid under a medically indigent program that significantly reduces their net income. People who have income above the Medicaid limit but have medical expenses that reduce their net income below the Medicaid limit may be able to get coverage for unaffordable expenses.
Does Medicaid or Medicare fund long-term care?
While Medicare covers hospitalization, short-term care in a skilled nursing facility, and hospice care, it does not cover long-term care. According to the American Council on Aging, Medicaid covers long-term care in nursing homes.
Some seniors can enroll in both Medicare and Medicaid to get more coverage for their health care needs. For example, a person may have Medicare that covers hospital treatments and Medicaid that covers long-term care.
To learn more about qualifying for Medicare or Medicaid, contact an elder law attorney.
Last updated: 11/28/2022
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