Medicare vs. Medicaid While Many

MEDICARE vs. MEDICAID

While many Americans might confuse Medicare and Medicaid for each other, assuming they are just two names for the same program, the differences between the two are clear enough to indicate how distinct and separate these two health programs are. Medicare is a federal insurance program that targets senior citizens of United States and provides them with coverage for many health conditions and treatment. It applies to people over the age of 65 with no regard to their income level. Cost of medical treatment is paid by trust funds that people have invested into. Apart from people over 65, it also serves some exceptions such as younger people with kidney problems or disabilities. It is solely a federal program and is therefore the same around the country. No state laws or amendments are applicable or allowed. Patients may have to make small payments in some cases while major coverage is provided by the program. "Medicare is a federal health insurance program that covers more than 41 million Americans: 35 million seniors and 6 million non-elderly people with disabilities. Medicare has covered eligible elderly beneficiaries without regard to income or medical history since it was established in 1965 and added coverage for under-65 people with disabilities in 1972. It is a source of coverage for one in seven Americans." (Medicare at a Glance)

Medicaid on the other hand is both a federal and state program. This is basically health assistance program that covers people of low income groups with little regard for their age. Cost is covered with the help of federal and local tax funds and a small co-payment may sometimes be required. The program varies from one state to another and each state has the autonomy to shape it according to its local needs and requirements.

Coverage

Medicare is divided into two-part coverage. The first one provides health insurance for inpatient care, nursing facilities and stay in hospitals or other medical facilities while the second part covers doctor's bill, medical drugs and equipment. Home health care is also covered in both parts of the program but to different extent. While Medicare program covers certain important healthcare services, it doesn't provide enough coverage for some other equally critical services which many disabled and elderly might require. Two critical loopholes in the program exist in the area of non-skilled long-term care and prescriptions. Regardless of its success, the program has these flaws and coverage must be provided in both these areas since they are critical parts of any older person's healthcare regimen.

Medicaid on the other hand is more comprehensive in its coverage even though it's not means-tested. The program varies from state to state but it broadly provides cover for inpatient and outpatient services, laboratory and x-ray costs, doctors' bill, nursing services, home-based care facilities along with services of midwife and pediatric nurse.

Some prescription drugs are also covered under the program and coverage might also be provided for certain optional services. "Medicaid provided health and long-term care coverage to 41 million low-income Americans in 1997." (Medicaid and Managed care)

Medicare despite its flaws is an important program that has been able to meet its targets and goals and there are numerous success stories that encourage further extension and expansion of the program. Ask any older person who is receiving Medicare and you will notice that even though they might point out the gaps in this program, they wouldn't want the government to roll it back. They all agree that life is certainly much better with Medicare than it was without it. It has been providing quality health coverage to senior citizens and disabled for forty years now.

Medicare was enacted in 1965 when most senior citizens were faced terrible times due to rising costs of healthcare services and limited means. At that point, health insurance was limited to less than 50% of the elderly population in the country while 70% or more were suffering from some kind of health problem. Ordinary insurance companies were not willing to extend insurance services to older citizens since it was considered a losing proposition.

With the enactment of Medicare, 99% of older people in the country have health insurance and poverty among this group has dropped significantly. With this program, people now have access to better healthcare services which has resulted in increased life expectancy. The reason we can say with some degree of certainty that Medicare has met its goals is grounded in the fact that it has provided elderly with greater access and more choices of healthcare facilities. Medicare gives them the opportunity to choose the best physician, good inpatient services and also pays their bills right on time to avoid problems with hospital and medical care authorities. "Medicare provides health benefits to 41.7 million elderly and disabled Americans. Most (88%) have their health bills paid by the traditional fee-for-service program, while 11% are covered by managed care plans, primarily HMOs." (Medicare advantage)

Along with this, Medicare has also managed to keep its costs significantly lower than those of private insurance companies. Medicare spends 2% of its budget on administration of the program while most insurance companies spend anywhere between 8 to 15%. By the end of 1998, Medicare witness less than 1% increase in costs per person while it went up 6 to 10% for private insurance companies.

Compared to Medicaid which is viewed as a comprehension program for low income groups, Medicare has certainly outperformed Medicaid in many ways. In 1998, when 88% of older people were covered by Medicare, 73% of low income groups did not have proper insurance. This means that an overwhelming majority of people (around 44 million) were left uninsured. Even employer-based insurance programs have not been able to perform well. Most workers are poorly covered under these programs and premiums have gone up from 12 to 22%.

Even though Medicare is a successful program, it comes with its flaws. These flaws require additional insurance. As we mentioned above that while Medicare provides good coverage, it ignores two important areas. It is for this reason that some people opt for additional insurance plans to expand their healthcare coverage. "