Medicare and Medicaid Medicare vs.

Medicare and Medicaid Medicare vs. Medicaid Despite the current resistance to healthcare reform, the United States does possess two public health insurance programs: Medicare and Medicaid. Medicare is the public health insurance program designed to provide the nation's elderly population with health services; Medicaid is designed to provide healthcare services to all Americans living below the poverty line.

The primary difference between the two programs is that Medicare is directly financed by the federal government while the federal funds for Medicaid are disbursed to the states, 'matching' the state money used to finance the program. Medicare is offered to lawful residents of the U.S. age 65 or older who have lived in the U.S. more than five years. Some individuals with certain permanent disabilities and all U.S. residents with end-stage renal disease are eligible for Medicare. Medicare is divided into two parts.

Medicare Part A helps pay for inpatient care while Medicaid B. pays for medically-necessary outpatient care. Medicare Part A does not have a standard monthly premium for most citizens if they or their spouses paid Social Security taxes. Medicare B. does. With standard Original Medicare there are deductibles and coinsurance for services.

Additional support exists in the form of Medicare prescription drug coverage Part D (given that prescription drugs are often a major expense for seniors) and the Medigap (Medicare Supplement Insurance) policy which provides assistance paying copayments, coinsurances, and deductibles. Seniors with limited income and resources can also receive additional help in paying for these expenses through Social Security or their state Medicaid office (What is Medicare, 2011, Medicare).

Medicaid can pay Medicare deductibles and premiums and 20% of all other charges not paid by Medicare (Medicare and Medicaid: What's the difference, 2011, Nolo) Medicare is not a poverty-based program -- anyone is eligible, although it was established in recognition of seniors' increased medical costs and historically lower levels of income. It was designed to prevent seniors and permanently disabled persons from falling into poverty because of failing health and an inability to work (Medicare and Medicaid: What's the difference, 2011, Nolo).

In contrast to Medicare, Medicaid primarily serves low-income citizens living at a state-determined poverty threshold. Depending upon the state, other citizens may be eligible, including pregnant women; children; low-income seniors who have trouble paying the expenses of their Medicare coverage; the disabled; and people in nursing homes. Unlike Medicare, Medicaid is not a purely federally-funded program.

Every state has a Medicaid budget, which the federal government 'matches' based upon a formula, despite the fact that Medicaid is considered an entitlement, implying that enrollees are entitled to benefits regardless of where they live. Because federal funding is 'matched' that means that states that spend more on Medicaid -- usually wealthier states -- tend to receive more federal funds (Villarreal 2006).

The reason for the 'matched' funding is partially due to the highly variable costs of living from state to state -- it is far more expensive to reside in New York City than Wyoming, for example -- and also to honor the principles of federalism, allowing the states to determine additional categories eligible for care. Although states must provide Medicaid for persons with income below a certain level, they do have a great deal of discretion in covering additional groups of persons.

For example, because of the increased financial demands put upon states as a result of the recession, many states are considering charging more for optional benefits, such as prescription drugs, dental services and speech.