Medicaid is a federal and state health insurance program that provides low-income individuals free or affordable medical, hospitalization, and prescription drug coverage. On the other hand, Medicare is a government-run program for people 65 or older and certain younger individuals with disabilities and permanent kidney failure. The program provides Medicare Part A and B supplemental and prescription drug coverage.
Medicare and Medicaid are federal-state programs providing health insurance coverage to low-income people. In both programs, eligibility is based on income and other factors.
The Affordable Care Act changed how people apply and enroll in the programs. The new method uses the Modified Adjusted Gross Income (MAGI) to determine financial eligibility for Medicaid, CHIP, premium tax credits and cost-sharing reductions.
Originally, Medicaid eligibility was tied to cash assistance programs such as Aid to Families with Dependent Children and Supplemental Security Income. Over time, Congress expanded Medicaid coverage to include children, pregnant women, and some individuals not eligible for cash assistance programs.
Medicare and Medicaid are federally funded programs that provide healthcare insurance to individuals in the United States. The Medicare program covers people age 65 and older, as well as some children with disabilities and people with end-stage renal disease (ESRD).
Medicaid is a social welfare and health care services program for low-income Americans. It provides health coverage to millions of people in the United States and is based on a means-tested formula, with a federal match for most enrollees.
Unlike Medicare, a fee-for-service (FFS) program, Medicaid operates as a vendor payment program. The state pays health care providers directly or through prepayment arrangements such as HMOs and Medicare Advantage plans. Within federally imposed upper limits, each state has broad discretion in determining the payment rate for health care providers.
Most of the population that Medicaid serves consists of seniors and people with disabilities. These beneficiaries make up nearly one-third of all Medicaid beneficiaries. Still, they account for almost two-thirds of spending, reflecting high per-enrollee acute and long-term care costs.
While Medicaid and Medicare are both federally-funded health insurance programs, they have different coverage and cost-sharing. It is important to understand the difference between these two programs before enrolling.
Medicare, the government's largest health insurance program, pays for inpatient care in a hospital or skilled nursing facility (following a stay in the hospital). It also covers home health and hospice care, durable medical equipment, and preventive services. In addition, Medicare pays for prescription drugs under Part D. Premiums for Part D plans vary based on the plan's benefit level.
Congress has tried to control Medicare spending through various means, including the Sustainable Growth Rate (SGR) and Medicare's Modernization Act of 2006. MMA requires that Medicare trustees determine whether general fund revenue will exceed 45 percent of total program spending within seven years. This is referred to as the "funding warning."
Managed care is a type of health insurance that uses various methods to control costs and improve quality. These include pre-authorizations, referrals to a primary care provider (PCP), and disease management tools. Many managed care plans require members to use participating medical providers and facilities. Some also restrict members' options for providers and pay a higher share of the cost for services from outside of their networks.
Typically, Medicaid-managed care programs are risk-based arrangements. These programs pay managed care organizations a fixed monthly capitation rate to cover all or some of their Medicaid enrollees' covered services. Purchasing specifications for managed care contracts often emphasize goals for improving access, coverage, and performance of Medicaid beneficiaries. Some states focus on these goals through highly detailed, specific aims; others choose broadly worded aims that leave the contractor with more discretion to implement them.