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Medicare vs. Medicaid

Published January 28, 2022

People confuse the differences between Medicare and Medicaid all the time. While both programs are government sponsored health care programs, they are very different. Medicare is a health care program managed and funded by the Federal Government with eligibility mainly based on age. Medicaid is managed by the individual states and funded by both the federal and state governments. Eligibility is mainly based on your income.

Medicare is available once you are 65 (or have a disability), and the benefits are much the same no matter what state you live in. Medicaid coverage differs from state to state, but is generally available to low income individuals and families, low income elderly, pregnant women, children and people with disabilities. In some states, all adults below a certain income level are eligible. 74.5 million people are currently enrolled in Medicaid programs around the country.

Do you qualify for Medicaid? For the majority of adults under age 65, eligibility requires that you have an annual income lower than 133 percent of the Federal Poverty Level. According to this amount for 2021 is approximately $12,880 for an individual and $26,500 for a family of four. You can find out more information about eligibility in your state here.

A few states require a small copayment for Medicaid services. Medicaid is considered a safety net program for those who have very few other resources to pay for their health care. Some states offer more financial assistance than others. Since Medicaid programs vary quite a lot by state, if you think you might meet the income requirements, you can visit Medicaid's website to find out more about your state, or our advisors can help answer your questions.

In California, a woman who is 70 years old, has $800 per month of income, would qualify for both Medicaid and Medicare. This person who is eligible for health care coverage by both income (Medicaid) and age (Medicare), would be considered a “dual eligible,” and that eligibility allows her to receive health care coverage from both programs. That assistance is likely to give her nearly free health coverage.

Medicare also has a program called “Extra Help” to pay for the costs of prescription drugs that you should check out if your income level as an individual in 2021 is $19,140 or $25,860 for a couple living together. If you are eligible for Medicaid, you automatically qualify for Extra Help. Don’t miss out on these important sources of assistance if you think you might qualify. You will need to fill out a form with the Social Security Administration program, but our advisors can help you do that.

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