medicare and medicaid: what are the differences
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MEDICARE AND
MEDICAID: WHAT ARE THE DIFFERENCES?
DEBORAH SEXTON ARKANSAS ESTATE PLANNING ATTORNEY
A Closer Look at Medicare and Medicaid – How They Are Different in Terms of
How the Programs are Run, Who Can Be Eligible for Benefits and the Limits on Those Benefits
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Medicaid and Medicare are two important healthcare programs
available to citizens of the United States. They were created when the
Social Security Act was amended in 1965 and are managed by the
Centers for Medicare and Medicaid Services. These programs
effectively extended healthcare coverage to almost all Americans age
65 or older and healthcare services to low-income children without
parental support and the relatives who take care of them, the elderly,
the blind and individuals with disabilities. Though these programs
have similar purposes, they are very different in terms of how the
programs are run, who can be eligible for benefits and the limits on
those benefits.
MEDICARE
Medicare is essentially an insurance program available to people over
the age of 65 regardless of income level, younger people who are
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disabled and patients with End-Stage Renal Disease requiring
dialysis. Through this program, patients pay a portion of the costs for
medical treatment through deductibles and monthly premiums
required for non-hospital coverage. Medicare benefits are usually
provided by private companies that contract with Medicare to provide
those benefits. Because Medicare is a federal program, it is basically
the same everywhere in the United States. Medicare has several
different parts that cover specific kinds of services:
Medicare Part A (Hospital Insurance), helps pay for care in a
hospital and skilled nursing facility, home health care and hospice
care. Most people don't have to pay for Medicare Part A because
Medicare provides the coverage. You have a choice of any doctor,
hospital or other healthcare provider that accepts Medicare. You or
your supplement insurance coverage would be responsible for
deductibles and coinsurance (or copays).
Medicare Part B (Medical Insurance), which helps pay for doctors,
outpatient hospital care and other preventive medical services. Most
people do pay for Medicare Part B. With Part B, you can also choose
any doctor, hospital or other healthcare provider that accepts
Medicare. You or your supplement insurance coverage would be
responsible for deductibles and coinsurance (or copays).
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Medicare Part C (Medicare Advantage Plans) are offered by a
private company that contracts with Medicare to provide Part A and
Part B benefits. Medicare Advantage Plans include the following:
Health Maintenance Organizations,
Preferred Provider Organizations,
Private Fee-for-Service Plans,
Special Needs Plans, and
Medicare Medical Savings Account Plans
Coverage is provided by the private insurance companies that are
approved by Medicare. You are required with most plans to use
doctors, hospitals and other providers who are within the plan. You
are required to pay monthly premiums in addition to any Part B
premium that you pay, along with deductibles and copays.
Medicare Part D (prescription drug coverage) adds prescription
drug coverage to Medicare Parts A and B, some Medicare Cost Plans,
some Medicare Private-Fee-for-Service Plans and Medicare Medical
Savings Account Plans. If you want this coverage, you should join a
Medicare Prescription Drug Plan and pay the monthly premium.
These plans are run by Medicare-approved companies. Some
Medicare Advantage Plans offer prescription drug coverage. If they
do not, you can join a Medicare Prescription Drug Plan.
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WHAT DO YOU DO ABOUT GAPS IN YOUR
HEALTHCARE COVERAGE?
If there are any gaps in your healthcare coverage, you can obtain what
is known as a Medicare Supplement Insurance or “Medigap” policy
through a private company. However, if you have a Medicare
Advantage Plan, you cannot use a Medigap policy to pay for any out-
of-pocket costs. In fact, if you already have a Medicare Advantage
Plan, you cannot be sold a Medigap policy.
WHO IS ELIGIBLE FOR MEDICARE?
If you are 65 years or older, a U.S. citizen or permanent resident of
the U.S., and you or your spouse have worked for at least 10 years at
Medicare-covered job, you are generally eligible for Medicare. If you
are not 65, but you have a disability or End-Stage Renal disease
requiring dialysis or a kidney transplant, you may also qualify.
MEDICAID
Medicaid is an assistance program, as opposed to an insurance
program, that serves low-income people regardless of age. Medical
bills are paid from federal, state and local tax funds and the patients
usually do not pay any of the costs for covered medical expenses. A
small co-payment is sometimes required. Medicaid is a federal-state
program, meaning that it is run by state and local governments within
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federal guidelines. Therefore, the specifics of the program vary from
state to state including the rules for Medicaid eligibility.
WHO IS ELIGIBLE FOR MEDICAID?
Most states offer
coverage for adults
with children below a
certain income level,
pregnant women,
certain seniors, and
people with
disabilities. The
Affordable Care Act of
2010 established a national minimum eligibility level for Medicaid of
133% of the federal poverty level. This new level goes into effect on
January 1, 2014. So, if you were told you did not qualify for Medicaid
before, you may qualify under the new law. There are other non-
financial eligibility criteria that are used in determining Medicaid
eligibility. For example, in order to be eligible for Medicaid,
individuals need to satisfy federal and state requirements regarding
residency, immigration status, and documentation of U.S. citizenship.
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WHAT MEDICAID BENEFITS ARE
AVAILABLE?
Although each State establishes and administers its own Medicaid
programs, there are
certain “mandatory
benefits” that must be
provided. These
mandatory benefits
include: inpatient
hospital services;
outpatient hospital
services; Early and
Periodic Screening,
Diagnostic, and Treatment Services; nursing facility services; home
health services; physician services; rural health clinic services;
federally qualified health center services; lab and X-ray services;
family planning; nurse midwife services; Certified Pediatric and
Family Nurse Practitioner services; freestanding birth center services;
transportation to medical care and tobacco cessation counseling,
including for pregnant women.
APPLYING FOR MEDICAID IN ARKANSAS
To apply for Medicaid, go to the Department of Human Services
(DHS) office in the Arkansas county where you live. Take the
following information about yourself and the family members who
live with you:
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Proof of your age such as a birth certificate, driver's license or a birth record from the hospital
Paycheck stubs for everyone in your household who has a job
Social Security card Letters or forms from Social Security, SSI, Veteran's
Administration, or other sources that show the amount of your income
Insurance policies, including other health insurance policies
Bank books or other papers that show the amount of money or property you own
Arkansas has several Medicaid Programs: ARKids First, ConnectCare,
ElderChoices, Alternative, DDS Waiver and TEFRA. For more
information visit the Arkansas Medicaid website.
https://www.medicaid.state.ar.us/
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About the Author
Deborah K. Sexton
As the sole attorney in the Fayetteville law
firm of Deborah Sexton Law Office, Deb
oversees a practice devoted to providing
clients with the best in estate planning.
Deborah Sexton, C.P.A., J.D., L.L.M.,
combines an extensive background in
accounting with a wide range of legal
experience to provide her clients with a
uniquely practical perspective. An attorney
since 1983, she now devotes her practice
primarily to estate planning and elder law.
EXPERIENCE
After obtaining her undergraduate degree in accounting from Abilene
Christian University in Abilene, Texas, she worked in Dallas in public
accounting for several years, and then went to the University of
Arkansas Law School in Fayetteville. Upon graduating from law
school, she went on to obtain an L.L.M. degree in Taxation from New
York University.
Deborah Sexton Law Office www.arkansas-estateplanning.com 2766 Millennium Drive Fayetteville, AR 72703 Phone: (479) 443-0062 Fax: (479) 443-2001
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