Medicare vs. Medicaid: The Differences You Should Know

You hear about Medicare and Medicaid a lot, on the news or from your family members or friends. But, if you’ve never had to draw from either program, you might not know how they differ.

When people are looking for ways to pay for their senior loved one’s healthcare or assisted living expenses, Medicare and Medicaid could be beneficial sources of funding, depending on your needs.

Explore this article to learn a little bit more about the differences between Medicare and Medicaid, who qualifies for program eligibility, and whether or not these programs could help cover your loved one’s healthcare expenses.

How Are Medicare and Medicaid Similar?

Medicare and Medicaid have many similarities, which is why it’s easy to confuse these terms. They are both government-provided and taxpayer funded programs that offer assistance with healthcare expenses. While these are both assistance programs, they have different goals and provide for different groups of people.

Eligibility

When it comes to Medicare vs. Medicaid, the biggest difference between the two is which groups are eligible for each one.

With Medicare, the eligibility requirements are pretty broad. Medicare provides healthcare funding for senior citizens. It serves people over 65 primarily (whatever their income), younger disabled people, and dialysis patients. Generally, if you or a spouse had a job and paid Medicaid taxes for at least 10 years, you’re eligible to receive Medicare.

Medicaid, in contrast, has strict income requirements to determine who is eligible. Medicaid provides financial services for low income individuals and families (not just seniors). However, the eligibility requirements are not the same across the board. The federal government funds up to 50% of the program costs, and the state supplies the additional funding. This means each state’s Medicaid program varies, as one state could only need the federal government to fund 20% of their program while another state could need the full 50% of funding.

With Medicaid, you generally must prove that most of your income or assets are going to care expenses, and that your care expenses exceed your income.

Because of the different eligibilities standards, someone could qualify for both Medicare and Medicaid, each one individually, or neither.  

The Effects of Medicare and Medicaid on Assisted Living

Now that you know little bit more about the differences between Medicare and Medicaid eligibility, let’s find out how each option impacts senior assisted living expenses.

First, let’s look at the individual impacts of each program. Medicare is an insurance program funded by a trust that those who are covered have paid into. Patients pay part of their costs through deductibles, or small monthly premiums for non-hospital coverage. Medicare is the same in every state, as it is a federal program. It’s important to note that Medicare or Medicaid will generally not cover assisted living expenses. Medicaid, however, can help pay for long-term care in a nursing home, but in almost every case, traditional assisted living is solely private pay.

Medicaid does not require low-income patients to pay for their medical expenses, unless it’s a small co-payment. Medicaid is run by state governments within federal guidelines, so each program varies from state to state.

Medicare and Medicaid can be used together to provide medical coverage to elderly and low-income individuals. Most seniors are able to use both of these programs at the same time to lighten the burden of medical expenses.

How to Use the Programs to Afford Assisted Living

Because these two programs were designed for healthcare assistance purposes and eligibility requirements vary, it can be hard to determine how to use Medicare and Medicaid to help your loved one. To ensure your family secures this government assistance and uses it the right way to support their healthcare costs, take the following steps.

Research What is Available

Medicare is the same regardless of the state you live in, but it’s still important to understand what is being offered to your loved one. You should also find out more about your specific state’s Medicaid program. What are your state’s specific eligibility requirements, and how much help can my loved one receive? When you know the answers to these questions, you’ll definitely have a better knowledge of the options that are available for you, your senior loved one, and your family.

Consider Your Loved One’s Needs

If your loved one is facing a short-term stay in rehab facility, Medicare could help pay for some of your expenses. For example, in Connecticut, Medicare covers up to a 21-day stay in a rehab facility. More so, Medicare could alleviate some healthcare bills, such as a hospital visit, but it will not cover long-term assisted living rent. This is a good option, however, for someone who needs short-term medical assistance as it can significantly reduce senior healthcare expenses. Consider your loved one’s needs carefully to determine which path is best for your family.

Evaluate Your Financials Carefully

Now that you know the financial requirements for Medicaid, you need to evaluate your and your loved one’s financial standing carefully to determine if either one of you qualifies. Look at bank accounts and assets and determine how much you can afford to contribute to your senior loved one’s care and if you quality for Medicaid benefits. While Medicare and Medicaid may not cover the rent at an assisted living community, they can definitely free up healthcare-related funds that can be applied to their stay.

Talk to an Expert

Because the process of untangling Medicare and Medicaid, and determining what your family can and can’t afford is complicated, it’s wise to get some help. That’s where the experts come in. Assisted living communities often have counselors on staff to help families like yours understand what is covered and not covered under Medicare and Medicaid when it comes to senior care in Connecticut. These experts can better guide you in your search for senior living options.

Distinguishing between Medicare and Medicaid can be hard, but just remember: both options were designed for different purposes, yet they both can play a role in providing for your senior loved one. To make these financial decisions easier for your whole family, be sure to consult with a senior living advisor for great insight. They may have creative options to help you get the funds you need.