Published on: June 6, 2023
Medicare and Medicaid are government health insurance programs helping people pay for healthcare. Their names may look and sound similar, but they differ in several ways, including requirements for eligibility.
Medicare is available to people with a work record at jobs where Social Security taxes were paid on the earnings. When a worker reaches age 65, Medicare coverage begins. Coverage also applies to eligible workers who become disabled and qualify for Social Security Disability Insurance, but there is a waiting period of 24 months before Medicare coverage is available.
Medicaid is similar to Medicare in providing health insurance benefits, but Medicaid does not require a work record for eligibility. Instead, Medicaid eligibility requires that a person have little or no income.
Under certain circumstances, a person eligible for Medicare may also qualify for coverage through Medicaid. Sometimes, a person may qualify for Medicare and Medicaid simultaneously. To get the most out of the benefits available to you, it’s essential to understand how dual eligibility works and the law determines who is eligible for Medicare and Medicaid.
How Does The Medicare Program Work?
Medicare is a federally funded and administered program available to people with work histories at jobs where Social Security taxes were paid on the earnings. If you worked long enough, you are eligible for Medicare at age 65.
It is also available to younger workers with a medically determinable physical or mental health impairment, making them eligible for disability benefits through the Social Security Disability Insurance program. However, disabled workers must wait through a 24-month qualifying period before they become eligible for Medicare coverage.
Medicare has two parts. Part A is for medical care provided in a hospital setting. Part B is for medical insurance for office visits with a doctor and other medical services outside of a hospital. Part A coverage is usually free to eligible beneficiaries, but there is a monthly premium for Part B.
A person who receives Medicare coverage due to SSDI eligibility may continue to be covered even after returning to work. As long as the person meets the definition of “disabled” used by the Social Security Administration to determine eligibility for SSDI benefits, they will be eligible for Medicare coverage for eight-and-a-half years after going back to work.
How Does Medicaid Work?
The federal and state governments share funding and administration of the Medicaid program to provide coverage for healthcare for more than 70 million people in the United States. It was created in 1966 along with Medicare through amendments to the Social Security Act.
The federal government sets broad guidelines for benefits and eligibility that allow states great flexibility in how they administer their programs. States decide who is eligible for Medicaid and the services covered by the program. As a result, eligibility and benefits in one state may be dramatically different from those in other states.
Generally, Medicaid eligibility is limited to low-income individuals and families. Unlike Medicare, you do not need a work history to qualify for Medicaid as long as your current income does not exceed the eligibility guidelines set by your state.
Federal rules set mandatory and optional benefits and leave it to the states to determine which optional services to offer. For example, the following are some of the mandatory benefits that Medicaid must cover:
- Inpatient hospital services
- Lab and X-ray services
- Physician services
- Family planning services and supplies
- Home health services
- Nursing facility services
Optional services that may or may not be offered by a state include:
- Chiropractic care
- Dental services
- Hospice care
- Prescription medications
- Prosthetic devices
If a state elects to cover an optional service, it has the discretion to determine the extent of the services it covers.
Who Is Eligible For Both Medicare And Medicaid?
You may be eligible for both Medicare and Medicaid, provided you meet the eligibility guidelines for each program. Dual eligibility situations frequently arise when someone meets the eligibility requirements for SSDI benefits, but they need health insurance during the 24-month waiting period before Medicare coverage begins.
A worker may have a long-enough work history to be eligible for SSDI. Still, based on lifetime earnings, their monthly benefit is low enough to make the person eligible for Medicaid.
The SSDI beneficiary may apply for Medicaid while waiting for the 24-month waiting period to expire. If their state finds them eligible for coverage, Medicaid becomes their primary insurer until they become eligible for Medicare. When that occurs, they may keep both coverages as a dual-eligible beneficiary. Medicare is the primary coverage, and Medicaid becomes the secondary coverage.
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