Medicare vs Medicaid

On Tuesday(01/28/2025), the Medicaid system was shut down across all 50 US states.

This seems to be related to the Trump’s administration order on freezing of federal grants and loans. But later, White House said it expected the system to be back online shortly. As of Octorber 2024, nearly 79 million Americans were enrolled in Medicaid program. The program is a significant source of funding for medical and health-related services for people with low income in the United States.

There is also another program called Medicare, which people often confuse it with Medicaid. In this post, we will discuss their differences.

1. Introduction

Medicaid and Medicare are both government programs in the US that provide health coverage, but they serve different populations and have distinct characteristics.

Medicare is mainly designed for those 65 and older or people with disabilities. Medicaid is for people with qualifying low-income.

2. Medicare

A brieft history:

1. Medicare’s Beginnings (1965): Aimed to provide health insurance to elderly Americans.
2. Expansion (1972): Eligibility extended to people with disabilities and ESRD.
3. Prescription Drugs (2003): Introduction of Part D for prescription drug coverage.
4. Reforms (2010s-Present): Additional provisions from the ACA to reduce costs and expand coverage.

➡️ Eligibility: Medicare is a federal program that primarily provides health coverage for people aged 65 or older, as well as certain younger individuals with disabilities or specific medical conditions, like End-Stage Renal Disease (ESRD).

➡️ Funding: It is funded by the federal government through payroll taxes and premiums paid by beneficiaries.

➡️ Coverage: Medicare has different parts:

• 📌 Part A (Hospital Insurance) covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health care.
• 📌 Part B (Medical Insurance) covers outpatient services like doctor visits, preventive services, and medical equipment.
• 📌 Part C (Medicare Advantage) is an alternative that offers both Part A and Part B coverage through private health insurance companies.
• 📌 Part D (Prescription Drug Coverage) helps cover the cost of prescription medications.

3. Medicaid

Medicaid is a joint federal and state program in the United States that provides health coverage to low-income individuals and families. Unlike Medicare, which primarily serves the elderly and people with disabilities, Medicaid is designed to assist those who cannot afford healthcare due to financial constraints.

A Brieft history:
Medicaid was created in 1965 to help low-income populations access healthcare and has evolved through expansions and reforms, including the ACA in 2010.

➡️ Eligibility:

• 📌 Medicaid is primarily aimed at low-income individuals and families, but eligibility varies by state.
• 📌 It covers groups such as: Children, Pregnant women, Elderly individuals, People with disabilities, Low-income adults.
• 📌 Each state sets its own income limits and requirements, meaning eligibility differs based on where you live.

➡️ Funding:

• 📌 Medicaid is funded jointly by the federal government and individual states.
• 📌 The federal government provides a percentage of the funding (the federal match rate), and states fund the remaining portion. The match rate varies by state, depending on the state’s average income level.

➡️ Coverage: Medicaid covers a wide range of healthcare services, including hospital visits, doctor’s appointments, prescription drugs, and long-term care. States may offer additional benefits beyond the federal requirements.

➡️ Medicaid Expansion (ACA, 2010):

• 📌 The Affordable Care Act (ACA) allowed for the expansion of Medicaid to cover more low-income adults. Under this expansion, states could extend Medicaid eligibility to people who earn up to 138% of the federal poverty level (FPL).
• 📌 However, states could choose whether or not to expand Medicaid, and not all states chose to do so, leading to differences in Medicaid coverage across the country.

4. Dual Eligibility

A person with dual eligibility qualifies for both Medicare and Medicaid. These individuals, often referred to as “dual-eligible beneficiaries,” are typically low-income seniors or people with disabilities who meet the income and resource limits for Medicaid while also being eligible for Medicare (usually due to age or disability).

Usually, Medicare serves as the primary insurance and covers hospital care (Part A) and medical services (Part B). Medicaid covers costs not paid by Medicare, such as Medicare premiums, deductibles, copayments, and coinsurance. It may also cover additional services not included in Medicare, such as long-term care, nursing home care, and some home/community-based services.

For more detailed information, you can check the revised official document on CMS website: link

References

• https://www.theguardian.com/us-news/2025/jan/29/medicaid-trump-funding
• https://www.cnbc.com/2025/01/28/trump-funding-freeze-medicaid-state-portals-omb.html
• https://www.wellpoint.com/medicare/understanding-medicare/medicare-vs-medicaid
• https://www.cms.gov/medicare-medicaid-coordination/medicare-and-medicaid-coordination/medicare-medicaid-coordination-office/downloads/medicaremedicaidenrolleecategories.pdf