Whether you’re already eligible or will be in the coming years, knowing the differences between Medicare and Medicaid will empower you to continue making sound decisions surrounding your finances. While both are government run and were created in 1965, Medicaid is not the same as Medicare.
Both programs were launched as part of President Lyndon Johnson’s “Great Society” vision of a general social commitment to meeting individual health care needs. Medicare and Medicaid are social programs that allow the financial burdens of illness to be shared among healthy and sick individuals, and affluent and low-income families. Here are the main differences:
Medicare is a federal insurance program that provides health coverage if you are 65 or older or have a severe disability, no matter your income. Medical bills are paid from trust funds, which those covered have paid into. It is pretty much the same everywhere in the United States and is run by the Centers for Medicare & Medicaid Services, an agency of the federal government.
Medicaid is a state and federal assistance program that provides health coverage if you have a very low income. Patients usually pay no part of costs for covered medical expenses, although a small co-payment is sometimes required.
Some people have been erroneously taught that they can “hide” all their assets, so that the government (through Medicaid) will pay all their health costs, especially the costs of long-term care (home, assisted living or nursing home). There is a way to legally and ethically transfer (and protect) assets but it has to be done very carefully and with the help of a professional.
If you want to talk with us about learning more about Medicaid and Medicare, the financial professionals at Gallagher Financial Group are here to help!
