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What Is The Difference Between Medicare and Medicaid?

It is easy to get a little mixed up when talking about Medicare and Medicaid. However Medicare and Medicaid are completely different programs with very important differences. To help eliminate the Medicare vs. Medicaid confusion, it’s important to understand how and when you qualify to benefit from them.

What Is Medicare & Who Qualifies For It?

Medicare is designed for people with End Stage Renal Disease, people that are 65 or older, and some younger people with disabilities.

Medicare is comprised of four parts. Each of the four parts covers the different elements of your healthcare needs.

Medicare Part A – This component is commonly known as hospital insurance and includes coverage for the following.

    • some home health care
    • care in a skilled nursing facility
    • hospice care
    • inpatient hospital stays


Medicare Part B – This component is commonly known as medical insurance and includes coverage for the following.

    • medical supplies
    • preventive services
    • outpatient care
    • certain doctors’ services


Medicare Part C – This component is commonly known as Medicare Advantage Plans.

Medicare Advantage Plans are provided by private companies that are contracted with Medicare. These companies provide healthcare plans that provide you with both Medicare Part A and Part B benefits. Medicare Advantage Plans typically include HMO plans, PPO plans, PFFS plans, Special Needs Plans, and Medicare Medical Savings Account Plans. If you decided to enroll in a Medicare Advantage Plan then your Medicare services are now covered through the Medicare Advantage Plan and are no longer paid for by Original Medicare. Most Medicare Advantage Plans generally offer prescription drug coverage.


Medicare Part D – This component is commonly known as the Outpatient Prescription Drug Coverage.

Original Medicare does not include an outpatient prescription drug coverage plan. Medicare Part D was introduced as a way to provide people on Medicare with some outpatient drug coverage. If you have Original Medicare with or without a Medigap plan (often referred to as a Medicare Supplement), then Medicare Part D can be purchased separately. Drug coverage plans vary from company to company in both coverage and cost. However, some of the Medicare Part C – Medicare Advantage Plan companies come with outpatient prescription drug coverage.


What Is Medicaid & Who Qualifies For It?

Medicaid is a connected federal and state program that assists people with limited income. Medicaid assist with the medical and prescription drug cost that Medicare won’t. To qualify for Medicaid you must be approved by the state you reside in.

Qualifying for Medicaid requires that you meet specific income and money guidelines. It is possible that your state may determine that you have “excessive income”. However, having “excessive income” doesn’t mean that you will not qualify for Medicaid. You can potentially qualify for Medicaid if you spend down a portion of your excess income in ways that are legally compliant with the Medicaid guidelines.