RFK Jr. Confused Medicare and Medicaid: Here's the Difference

Ordinary people confuse Medicare and Medicaid all the time. However, when the person pegged to lead the U.S. Department of Health and Human Services (HHS) gets the two programs mixed up, it’s apt to raise some eyebrows.

During a Jan. 29 Senate confirmation hearing, Robert F. Kennedy Jr., President Trump's nominee to oversee HHS, confused some key elements of Medicare and Medicaid.

When asked about integrating care for enrollees in Medicare and Medicaid simultaneously, Kennedy described Medicaid as "fully paid for by the federal government." Medicaid, however, is actually funded by states and the federal government combined.

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Kennedy also referenced Medicaid enrollees' dissatisfaction with their high premiums and deductibles. But Medicaid enrollees typically aren't charged premiums or deductibles, so that statement seems like it should have been targeted toward enrollees in Medicare.

Despite their similar names, Medicare and Medicaid are two distinctly different healthcare programs. Here are some key differences.

What is Medicare?

Medicare is a federal health insurance program that typically serves people aged 65 and older. Enrollment before age 65 may be possible for people with certain disabilities, end-stage renal disease, or ALS.

People collecting Social Security or certain disability benefits are enrolled in Medicare automatically at age 65. Otherwise, enrollees typically get a seven-month period to sign up that begins three months before the month they turn 65 and ends three months after the month of their 65th birthday.

Medicare premiums and other charges

Medicare has multiple parts or categories of coverage, some of which require enrollees to pay.

Parts A and B: Medicare enrollees typically do not pay a monthly premium for Part A, which covers hospital care. But monthly premiums do apply to Part B, which covers outpatient services. An annual deductible applies to Part B, and Part A enrollees pay an inpatient deductible per hospital stay.

Because Medicare is federally funded, all Parts A and B enrollees are entitled to the same level and scope of coverage.

Part D: Medicare enrollees can also choose Part D drug plan coverage or opt to sign up for Medicare Advantage, which is typically all-in-one coverage. Private insurers offer Medicare Advantage plans to people enrolled in Parts A and B.

Some Medicare Advantage and Part D plans charge enrollees a premium, but not always. And Part D and Medicare Advantage plans typically have an annual deductible.

The scope and cost of coverage under Medicare Advantage and Part D is plan-specific. The number of Medicare Advantage and Part D plans, and the quality of those plans, varies by state.

What is Medicaid?

Medicaid is a health insurance program for low-income individuals jointly funded by states and the federal government. Although the federal government oversees Medicaid, each state administers it for its residents. Each state is tasked with setting its income thresholds for eligibility and deciding what benefits its Medicaid plans offer.

Although states have the option to charge premiums and impose deductibles on Medicaid enrollees, federal law limits the extent to which states can impose cost-sharing requirements. Many enrollees in Medicaid don’t pay premiums or deductibles since they’re based on income.

Differences in coverage

One key difference between Medicare and Medicaid is that the former is largely age-based, while the latter is income-based. This means that people 65 and over can qualify for Medicaid despite also being eligible for Medicare.

Medicaid covers low-income adults under, over, or exactly 65, children, and people with certain disabilities. Medicare only covers Americans 65 and over and those with certain disabilities or the health conditions noted above.

Not only are Medicare and Medicaid different in terms of eligibility, but they also differ in terms of the services they cover. All states must provide certain benefits through their Medicaid programs, including physician services, hospital services, lab work, and X-rays.

Some state Medicaid programs also cover dental care, eye exams, and glasses — services often covered by Medicare Advantage plans but not original Medicare. Medicaid plans may also cover additional services not paid for by Medicare, including nursing home care, personal care, and home-based services.

Source: Boomer Benefits and National Council on Aging.

Dual eligibility for Medicare and Medicaid

If Medicare mainly covers older people and Medicaid poor people, then it stands to reason that some Americans aged 65 and over may be eligible for both Medicare and Medicaid. The Qualified Medicare Beneficiary (QMB) program effectively covers the cost of Medicare Parts A and B for qualifying low-income individuals, including eligible Medicaid enrollees.

Generally, Medicare is the primary payer for people enrolled in both Medicare and Medicaid. Dual enrollees are automatically enrolled in a Medicare Part D drug plan to cover the cost of prescriptions instead of Medicaid, though Medicaid may still pay for certain non-Medicare-covered drugs.

Different ways to get health care

Medicare and Medicaid both provide health care coverage, but the similarities largely end there. They're run differently and serve different groups, and the coverage available under each program is different.

Working Americans nearing retirement age should read up on Medicare to understand what their costs and coverage will entail. Information on Medicaid, including eligibility, is available through each state's Medicaid agency.

Read More

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