Friday, November 30, 2012

What is the Difference Between Medicare and Medicaid?

As an attorney I spend a lot of my time educating clients and seminar attendees on the basics of wills, trusts and estates.  Translating law into plain English is a job requirement, and one I really enjoy.  As the work week comes to an end I offer the following post on the difference between Medicare and Medicaid.  While the words are similar, they are two very distinct programs.  And since Friday is my day out of the office, allowing me to focus on parenting my 4 and 2 year old children, this post was composed one an assistant of mine, Katherine Young, who is in her third and final year of law school at my alma mater, the University of Wisconsin.

I'l be back next week with more thoughts on illness, death and taxes for the middle class.  Thanks for reading, and remember a blog is not an attorney -- always seek counsel from an attorney licensed in your state.

Guest Post by,
Katherine Young,
3L Unv. of Wisconsin


During this past election year, the government programs Medicare and Medicaid have received a lot of attention. While most of the discussion focused on potential changes to the programs, it is important to understand how they function today. As people age, their health care needs and costs will inevitably increase. These two programs are designed to help with such health care costs, but accomplish that goal in very different ways. Both programs also have distinct eligibility requirements and coverage. 
Medicare is a federal health insurance program. It functions basically the same everywhere in the United States and is run by the Centers for Medicare & Medicaid Services, an agency of the federal government. Medical bills are paid from trust funds which those covered have paid into. The program primarily serves people over 65 years old, whatever their income; and also serves younger disabled people and dialysis patients. The specific part of the program a person enrolls in when eligible determines what services are covered. Part A covers hospitalization costs, Part B covers additional medical costs, and Part D provides prescription drug coverage. Additionally, people can chose to purchase a private supplemental insurance policy called “Medigap coverage” to help with some costs that would otherwise not be covered. Patients pay part of the costs of health care services through deductibles for hospital and other costs. Small monthly premiums are required for non-hospital coverage. To find out more information about Medicare, you can visit www.medicare.gov.
Medicaid, however, is a joint federal and state assistance program. It varies from state to state and is run by state and local governments within federal guidelines. The program’s purpose is to provide for the health care costs of low-income people of every age. However, each state has strict eligibility requirements. The federal government mandates that certain health care costs, such as hospitalization and doctor services, are covered and each state then has the option of including additional benefits. Additionally, Medicaid is also often used to fund long-term care, which is not covered by Medicare or by most private health insurance policies. Medical bills are paid from federal, state and local tax funds. Patients usually pay no part of costs for covered medical expenses but a small co-payment is sometimes required. To find out more information about Wisconsin's Medicaid program, you can visit

No comments: