As of 2023, the average healthcare insurance in the United States costs $560 per month – a 4% increase in 2022’s $530. With the soaring costs of medical insurance, the need for government aid healthcare programs is imperative.
Medicare and Medicare are two government-offered healthcare programs designed for specific people in the country. Unlike private insurance, the bills generated by the billing companies are submitted to different parts of the government for payment instead to private providers.
If you are part of an NJ medical billing company, you must know the difference between private payers and government-operated Medicare and Medicaid programs.
Medicare vs. Medicaid Overview
- Medicare is a federal program, and Medicaid is a state and federal program
- Medicare covers medical services for citizens aged 65 or 65+ or individuals with chronic disabilities
- Medicaid is a government-run program for people with low incomes
Established on July 20, 1965, by President Lyndon B. Johnson, Medicare is a health coverage program mainly designed for senior American citizens aged 65 and the plus and citizens with certain disabilities and debilitating health conditions.
The eligibility criteria for the program depend on whether the service required is ‘medically necessary’ as per the guideline established by national regulations, federal laws, and local coverage decisions.
Medicare comprises four parts, each serves for different purposes. Let’s break down each part to understand clearly what each covers, as well as their monthly premiums and deductibles.
Medicate Part A largely covers an individual’s inpatient care at the hospital. The coverage extends from hospice care all the way to overnight hospital stays, including other long-term stays, nursing facilities, and home care.
Medicare Part B covers care services that are not included in part A for instance, services from doctors and healthcare professionals, home health care, outpatient care, durable medical equipment (walkers, wheelchairs, hospital beds etc.), and a bunch of preventive services (vaccines, yearly ‘WellnesS’ visits). Medicare part A and B combined form the basic Medicare service package.
Medicare Part C, also called Medicare Advantage Plan, offers almost the same benefits as part A and B. The only difference is that Part C subscribers receive coverage through private insurers. Patients under this program are eligible to receive care services offered by PPO and HPO organizations, and the federal government reimburses those private insurers. Those under this program don’t need to subscribe to part A and B.
Medicare part D also called Medicare’s prescription drug benefit, is a relatively newer plan instituted following the Medicare Prescription Drug Improvement and Modernization Act of 2023. The plan is only offered through private insurers that have partnered with the federal government. Part D provides coverage for most outpatient prescription drugs during healthcare.
These are all the parts of the Medicare program under which patients can receive varied medical benefits. However, to be eligible for this program, one must be 65 or above, a US citizen, and enrolled in Social Security.
People who age below the criteria and have certain disabilities and conditions like end-stage renal failure or Amyotrophic Lateral Sclerosis (ALS, also called Lou Gehrig’s disease).
As mentioned earlier, Medicaid is another government-run healthcare program for children, low-income adults, elderly adults, pregnant women, and people with disabilities. The healthcare program was signed along with Medicare back in 1965 across all the states.
Unlike the Medicare plan, which has universal standards across the country, Medicaid has certain restrictions and regulations that vary from state. While all the states take Medicaid, you can expect to see border variations in the policies and regulations than the Medicare plan.
Medicaid eligibility criteria largely differ from state to state. That said, there is a relatively basic criterion that is the same for every state. It includes
- Adults with children making less income meeting the plan’s criteria (varies from state to state and number of children)
- Individuals suffering from disabilities
- Individuals earning an income up to 133% of the poverty line.
Apart from that, individuals earning slightly above the minimum income threshold and receiving Social Security benefits may also be eligible for the program.
Even though these criteria matter in most cases, there are other factors that determine a person’s eligibility for the program. Medicaid categorized its subscribers on different levels depending on how they fit into particular categories, which may include poverty-stricken individuals, pregnant women, nursing mothers, chronically disabled individuals etc.
Medicaid covers a variety of healthcare services for its subscribers, including:
- Inpatient and outpatient hospital services
- Nursing Facility services
- Physician services
- Home health services
- EPSTD (Early and Periodic Screening, Diagnostic, and Treatment Services)
- Rural health clinic services
- Lab and X-ray services
- Family planning services
- Certified Pediatric and Family Nurse Practitioner services
- Federally qualified health center services
- Freestanding Birth Center services
- Tobacco cessation counseling for pregnant women
- Conveyance to medical care services
Besides these, each state has the liberty to include additional benefits such as physical therapy, prescription drug coverage, prosthetic devices, dental services, optometrist services, eyeglasses, and much more.
In addition, Medicaid is often used to aid long-term medical care, which Medicare or private insurers don’t provide. It has been used as the primary payer for long-term care across the nation as well as serve as financial aid for nursing facilities for those who have depleted their savings and have no means to pay for their healthcare services.
What is the difference between Medicare and Medicaid?
The prominent difference between Medicare and Medicaid is that the former is available for seniors 65 and older and individuals with disabilities. On the other hand, Medicaid is for low-income earning individuals and other specified situations.
These are the bare bones of both the government-provided healthcare programs for people with disabilities and special needs.
Both are widely accepted across the United States. NJ medical billing company also enrolls individuals with both, Medicare and Medicaid healthcare programs under Dual Eligible Special Needs Plan. However, you may have to check the eligibility criteria for both plans in that particular state.