Medicare and Medicaid: What Are the Differences?
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WHAT ARE THE DIFFERENCES?
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
MEDICARE AND MEDICAID:
DEBORAH SEXTON
ARKANSAS ESTATE PLANNING ATTORNEY
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).
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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.
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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 outof-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
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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 nonfinancial 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.
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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:
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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/
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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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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
MEDICARE AND MEDICAID:
DEBORAH SEXTON
ARKANSAS ESTATE PLANNING ATTORNEY
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
An Arkansas Estate Planning and Trust Information Center
www.arkansas-estateplanning.com
2
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).
An Arkansas Estate Planning and Trust Information Center
www.arkansas-estateplanning.com
3
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.
An Arkansas Estate Planning and Trust Information Center
www.arkansas-estateplanning.com
4
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 outof-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
An Arkansas Estate Planning and Trust Information Center
www.arkansas-estateplanning.com
5
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 nonfinancial 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.
An Arkansas Estate Planning and Trust Information Center
www.arkansas-estateplanning.com
6
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:
An Arkansas Estate Planning and Trust Information Center
www.arkansas-estateplanning.com
7
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/
An Arkansas Estate Planning and Trust Information Center
www.arkansas-estateplanning.com
8
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
An Arkansas Estate Planning and Trust Information Center
www.arkansas-estateplanning.com
9
