What is the Difference between Medicare and Medicaid?
Medicare is the nation’s health insurance program for people over 65 years of age and certain people with disabilities. It is administered by the Centers for Medicare and Medicaid Services (CMS) of the U.S. Dept. of Health and Human Services.
The Medicare program is divided into two sections:
Medicare Part A (hospital insurance) helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care. Part A has deductibles and co-insurance. However most people don’t have to pay premiums for Medicare Part A.
Medicare Part B (medical insurance) helps pay for doctor’s services, outpatient hospital services, durable medical equipment and a number of other medical supplies and services not covered by Medicare Part A. Medicare Part B has premiums, deductibles and co-insurance amounts that you must pay yourself or through coverage by another insurance plan.
Medicare Part C (Medicare Advantage) is a part of Medicare that allows private health insurance companies to provide Medicare benefits. This is usually offered by private health plans such as HMOs and PPOs.
Medicare Part D (prescription drug insurance) helps pay for prescription drugs. Medicare Part D is provided by private insurance companies that have contracts with the federal government. Part D is not provided directly by the federal government like Medicare Part A and B.
Medicaid is jointly funded by the federal and state government to provide medical benefits to certain low-income individuals. Operated and administered by the state, this program is subject to broad federal guidelines, state-determined program benefits and eligibility requirements.
In the state of Alabama, Medicaid eligibility is based on several factors:
- The individual’s monthly income;
- The individual’s resources (such as real estate, checking and savings, stocks and bonds, trusts, loans, cash, mutual funds, etc.)
- Residence requirements (must be a citizen of the United States or a lawful alien admitted for permanent residence, must be a resident of the state of Alabama, and, for institutional stays, must be a resident of the approved medical institution for at least 30 continuous days.);
- Disposal of resources restrictions (an individual will not be eligible for nursing facility payments if resources such as real estate, checking and savings, stocks and bonds, trusts, loans, cash, mutual funds, etc., are disposed of, deeded, given away, or transferred to another name for less than fair market value of the resource if such disposal is made to meet Medicaid eligibility requirements. The “look back” period for disposal of resources is 3 years. This carries a penalty period from the date of disposal, depending on the uncompensated value of the transfer. The transfer period can be an indefinite length of time if resources have been transferred within 3 years of application.
- The date of the transfer and the value determine the length of the period of ineligibility;
- Medical Approval. This means that:
- An applicant must be medically approved by Utilization Control or Medicare prior to financial approval. The nursing facility must submit the medical information for this determination;
- An individual must apply for and elect to receive any assistance from annuities, pensions, retirements, disability benefits, or other income to which he is entitled. Persons failing to do so may be deemed ineligible for this reason.