The names sound very similar but Medicare and Medicaid are two very different things. There is so much information circulating about the coverage offered by these two popular resources, that it can be difficult to sift through it all in order to know how best to access the many benefits available. Concerns about eligibility and coverage arise as boomers navigate the many rules and regulations of Medicare and Medicaid.
Below are four facts every baby boomer should know about these two programs.
1. Medicare and Medicaid cover specific health care expenses with many limitations about what exactly is covered by each.
Medicare covers
Part A covers hospital care. In some cases, it also pays for home health care services and skilled nursing facility expenses. Hospice care is another benefit offered by Medicare Part A and is provided for a limited period of time.
Medicare Part B provides coverage to pay expenses related to doctor’s visits, X-rays, outpatient hospital care, blood tests and diabetic supplies. Baby boomers can breathe easy knowing that most physician’s tests are covered by Part B.
Medicare Part C or Medicare Advantage Plans pay for services not typically covered by Plan A or Plan B. Some of the expenses covered are dental, vision, hearing, and gym memberships. Transportation expenses related to travel to and from doctor’s appointments and over-the-counter medication are also paid for in some plans.
Medicare Part D covers prescription drug expenses. While not all boomers elect to make this Medicare benefit a priority, other seniors select it as part of their Medicare Advantage Plan.
Medicare does not cover
Original Medicare does not pay for eyeglasses, prescription drugs, dentures, hearing aids, medical marijuana, medical expenses incurred in locales outside of the U.S., sterilization, and cosmetic surgery. Baby boomers often turn to Advantage plans to cover many of these expenses.
Medicaid covers
As a government insurance program regulated by the federal government, certain specific benefits are non-negotiable and must be covered to comply with federal law. Inpatient and outpatient hospital bills are always covered. Additionally, physician services, nursing home care, x-rays, lab services, home health care, and services offered by rural clinics are also paid by Medicaid coverage.
Optional Medicaid coverage
As a partnership between federal and state governments, the states have some influence on optional services offered. Some optional services paid by some states include dental care, vision services, prescription drugs, hospice, case management, personal care, physical therapy, rehabilitation care, podiatry, respiratory services, and speech therapy.
What Medicaid does not cover
Services deemed as medically unnecessary or unreasonable are not covered. Additionally, some tests or services are not covered. Baby boomers need to have some cash on hand to pay for uncovered costs.
In cases where charges have been paid for by another government agency, Medicaid won’t approve the claim. This makes sense since the government makes every effort to keep expenses low by not overpaying.
Medical charges that are bundled or charged incorrectly also risk not being covered. Additionally, Medicaid won’t pay for the following expenses.
- Medical services incurred outside of the U.S.
- Medical equipment replacements made with a warranty
- Beautician services
- Personal comfort requests such as TVs
- Cosmetic surgery
- Free health screenings or giveaways
2. Medicare and Medicaid recipients are required to pay certain costs.
Medicare Expenses for 2021:
Part A Expenses
Eligible U.S. citizens who paid into Medicare for a minimum of 40 quarters or about 10 years don’t pay anything for Medicare Part A. For people with 30-39 quarters of credit, they can purchase Medicare coverage for $259 per month. Enrollees with less than 30 quarters of Medicare taxes paid into the system are charged $471 per month for coverage.
While most citizens don’t pay for Medicare Part A coverage, all enrollees must pay inpatient deductibles and coinsurance charges as detailed below and reported by Investopedia.
- $1.484 deductible annually
- First 60 days, $0 coinsurance is due
- Days 61-90, $371 coinsurance due daily per benefit period
- Days 91 and later, $742 coinsurance is charged for each benefit period
- All costs are due after lifetime reserve days are met
Part B Expenses
Premium costs for standard Part B is typically $148.50 for most enrollees with higher premium charges applicable for higher-income enrollees.
There is a $203 deductible. Once the deductible has been paid in full, then 20% is owed by the enrollee in coinsurance for the majority of doctor services, durable medical equipment costs, and outpatient therapy.
Part C Expenses
Varies based on Plan.
Part D Expenses
Varies based on Plan.
Medicaid Expenses for 2021:
The states can set their own premiums and deductibles for Medicaid beneficiaries in their state. Baby boomers must consult with their state’s Medicaid rules for planning purposes.
Medicaid benefactors with higher incomes more than 150% of the poverty level may be charged more for the services listed below.
– States may charge coinsurance of as much as 20% of the cost of a drug
– Enrollees who use the emergency room for non-emergency health care can be charged the full price for care.
– Small monthly premiums can also be charged to high-income earners.
3. There are distinct benefits associated with each program.
Medicare:
Benefit #1
Medicare is not income-related so it is widely available to most U.S. citizens for free when they reach 65 years of age or suffer from disabilities that are covered. Late-stage renal disease qualifies U.S. citizens for Medicare coverage with no applicable age restrictions.
Benefit #2
Medicare Advantage plans often save boomers money on lab services with HMO networks paving the way for substantial savings on health care services.
Benefit #3
It is common to pay no premium with low deductibles or zero deductibles for many Medicare Advantage plans.
Benefit #4
Baby boomers who choose Medicare Advantage plans appreciate the established limits on out-of-pocket expenses offered.
Benefit #5
Medicare Advantage provides different plans that meet an enrollee’s unique health care needs.
Benefit #6
PPO or PFFS plans offer provider freedom and also cover additional services such as dental, hearing or vision coverage.
Benefit #7
Medicare Advantage plans provide an added advantage of coordinated care where providers communicate with each other often leading to better care and lower costs by avoiding medication interactions.
Benefit #8
Medicare enrollees benefit from care under one convenient plan.
Medicaid:
Benefit #1
Boomers who would not otherwise afford insurance or health care are able to get it.
Benefit #2
It costs less than Medicare typically, with copays free or as low as $2 in some cases.
Benefit #3
Medicaid pays for nursing home services, long-term care and other medical care that isn’t covered by Medicare.
Benefit #4
Medicaid pays for many premiums and participates in cost-sharing for qualified Medicare beneficiaries.
Benefit #5
Medicaid makes Medicare coverage possible for low-income Baby boomers by paying Medicare premiums.
4. There are some downsides associated with each program.
Medicare:
Medicare Downside #1
HealthMarkets reports that the unhealthiest people enrolled in Medicare paid 2.5 times higher out-of-pocket costs compared to their healthier counterparts.
Medicare Downside #2
Hospital care expenses can still cost a lot for individuals suffering from chronic conditions. It is not uncommon for this expense to run into the thousands which is prohibitive for many enrollees.
Medicare Downside #3
The large number of enrollees hospitalized for preventable medical conditions they can’t pay for fuels price hikes across the board for every patient and also places a financial strain on hospitals.
Medicare Downside #4
Medicare payouts have been known to encourage fraud. HealthMarkets reports that in the year 2017, 412 physicians were charged with fraud for billing Medicare for drugs that weren’t prescribed or purchased, and treatments or testing that was not completed. This fraud accounted for $1.3 billion dollars.
Medicare Downside #5
The high cost of Medicare is paid for through payroll tax deductions which accounts for
1.45% of an employee’s gross pay. An added .9% is paid by employees who earn over $200,000.
Medicaid:
Medicaid Downside #1
Huge demand for physicians who accept Medicaid in certain geographic locales can create doctor shortages forcing many baby boomers to travel for care or wait as long as six months for an appointment.
Medicaid Downside #2
Medicaid patients may be refused care by many doctors who don’t accept Medicare as a payment option.
Medicaid Downside #3
Since Medicaid can refuse to pay for some services after they’re been rendered and are also unpopular because they pay less than what doctors usually charge, Medicaid patients’ care often suffers.
Medicaid Downside #4
There are claims by some states that Medicare funds are unequally allocated in favor of wealthier populations.