There’s a lot of talk going on about health insurance, much of it about Medicare and Medicaid- two of the biggest insurance programs in the United States. So what are they? And what’s the difference? Read on to find out.
So what is Medicare?
Medicare is a federal program for senior citizens (ages 65+) and the disabled. Its core plan is Medicare Part A. This plan allows for limited hospitalization and nursing home coverage for its members free of charge.
Members also have the ability to opt into additional parts of Medicare if they elect to pay an affordable, monthly premium. For example, Medicare Part B covers outpatient care and mental health, while Medicare Part D allows for prescription drug coverage.
Because most people over the age of 65 are on Medicare, it is quite expensive. Medicare cost the federal government $600 billion, and accounts for close to 15% of the federal budget.
How about Medicaid?
Medicaid is a public insurance program that provides health coverage to low-income individuals and families, as well as children and expecting mothers. Although it does receive funding from the federal government, it is mostly a state-run program.
Because it is state-run, each state has their own definition as to who qualifies as low-income. For example, in Texas an individual needs to be a parent of a family and have a yearly income of less than $3,700 to qualify for Medicaid. On the other hand, in a state like California the yearly limit increases to $17,400 for all individuals, regardless of family status.
Medicaid covers most basic hospitalizations and medical procedures free of charge. Close to 70 million Americans are on Medicaid and it accounts for 9% of the federal budget and costs about $500 billion per year.
Hope that helps!