Understanding Medicare Plans and Why Medicaid is Different

Learn the basic difference between Medicare vs Medicaid and how to compare Medicare plans for Part D prescription coverage, supplement insurance, and Medicare Advantage.

Medicare vs Medicaid

Medicare…

• Is health insurance for individuals that qualify for Social Security Benefits because of age (65 and older), disability, or kidney failure (also called ESRD – End Stage Renal Disease).
• Is funded solely by the federal government and overseen by the Centers for Medicare and & Medicaid Services (CMS).
• Eligibility for benefits is based on age or disability.
• Policies offered in different states must meet the minimum national coverage requirements dictated by CMS.

Medicaid…

• Is health insurance for individuals with limited resources, especially children, low-income families, disabled persons, and pregnant women.
• Is funded primarily through the state governments and partly through federal subsidies.
• Eligibility is income-based and insurance can be temporary or permanent.
• Coverage is not the same everywhere – each state sets their own requirements for eligibility and insurance benefits.

When an individual qualifies for both Medicare and Medicaid, they are called a Medicaid Qualified Medicare Beneficiary (MQMB). People with this type of dual coverage don’t usually need to purchase additional insurance protection because Medicaid strictly limits their out-of-pocket expenses. For additional information about Medicare vs Medicaid, or to find out more about income, eligibility, and how to get Medicaid in your state, visit Medicaid.gov

Compare Medicare Plans & Coverage Options

Original Medicare, Medigap, and Part D

Original Medicare is offered directly through the federal government. Part A benefits for hospital stays are included. You will only be charged a premium if you choose to sign up for Part B, which pays for doctor’s office and outpatient services. Medicare takes care of most expenses, but unless there is other insurance, you will usually be responsible for a deductible, copayment, or coinsurance.

Medigap is a catch-all term for referring to Medicare supplemental insurance. In most states, there are ten types of supplement plans to choose from. The federal government dictates what these policies cover and the insurance is offered through private companies that set their own premium rates.
Supplement policies help pay for deductibles, coinsurance, and some Medicare non-covered services. However, since 2006, Medigap policies are prohibited from offering prescription drug coverage and supplement insurance in one plan. If you’re enrolled in Original Medicare and a supplement, you’ll have to consider buying separate coverage for your medications.

Medicare Part D is the term for prescription coverage that is purchased as a separate private insurance plan. Each policy provider decides which drugs they will and won’t pay for and under what circumstances. Before choosing your prescription plan, make sure to review the plan’s Part D drug formulary, or list of covered medications and treatment, to verify it meets your specific needs.

You are not required to sign up for separate prescription coverage. However, a financial penalty applies if you decide to add Part D coverage more than 63 days after your first enrollment or after cancellation of your previous drug benefits from a Medicare Advantage plan.

If you’re just learning how to sign up for Medicare, shopping for the right insurance can be overwhelming and confusing. Read more about prescription coverage options or check out our Medigap 2018 Guide to find out more about choosing the best Medicare supplement for your situation.

Medicare Part C

Medicare Advantage is like having regular insurance that replaces all of your other Medicare benefits in a single plan. A Medicare HMO or PPO is administered by a private insurance company that contracts with a network of doctors and hospitals. When you receive care within that network, your insurance pays for those services at an agreed upon rate.

To be eligible to sign up for a Medicare Advantage plan, you must have enrolled in Part B coverage. Most Advantage policies include prescriptions coverage and some even offer dental and vision benefits. Be sure to examine the company’s plan summary and drug formulary closely when shopping for premium prices.

Key things to remember about Medicare Advantage:

• Medicare Part B coverage is required to enroll.
• HMO plans require staying in-network, selecting a primary care physician, and getting a referral to see a specialist.
• PPO plans require staying in-network but you can visit any doctor, including a specialist, without a referral.
• Coverage through Advantage plans cannot be combined with Medigap.
• An Advantage plan may include benefits that are not covered by Medicare like vision screening, dental treatment, or prescription costs.

If you have questions regarding Medicare vs Medicaid, or you’re still not sure which type of policy you need or you have additional questions about the best Medicare plan for you, let us know. One our knowledgeable associates will address your concerns and walk you through all the available options. Already familiar with your Medicare choices and just looking for a great premium with the best coverage? Contact one of our agents for a personalized quote now.