The ABCs of Medicare

July 30, 1965. A great day to be a senior adult in America. On that day, President Lyndon Johnson signed the Medicare and Medicaid health plans into law. Harry Truman was on hand to receive the very first Medicare card — rather appropriate since the former president was the first to propose national health insurance way back in 1945. So what’s the difference between Medicare and Medicaid? Learn the ABCs of Medicare here.

Medicare. The four parts of this health care plan cover medical expenses for people who are over 65 or have special health conditions.

• Part A will pay for expenses like inpatient care in a hospital, hospice, or a skilled nursing facility. If you paid into the Medicare system for at least 10 years while you were working, Part A coverage is premium-free. But don’t forget about the annual deductible.
• Part B covers outpatient care like doctor visits, flu shots, and some screening tests. You’ll pay an annual deductible as well as monthly premiums. If you receive Social Security, your Part B premiums will be deducted from your check. If you don’t get Social Security yet, you’ll get a monthly Medicare Premium Bill instead.
• Part C includes Medicare Advantage plans which you can find on clearmatchmedicare.com. These are managed-care plans that pay for everything covered by traditional Medicare, which includes parts A and B, along with extra benefits like vision, dental, and hearing. You can choose either a Medicare Advantage plan or traditional Medicare — but not both. Want traditional Medicare but still need extra coverage? You can always add a Medigap policy, also known as Medicare supplement insurance, to help fill in the gaps.
• Part D is your prescription drug coverage. Harry Truman didn’t have the option to sign up for this part of Medicare, but you do. You can choose from a number of different drug plans, but you’ll have to pay an average premium of $34 per month.

Medicaid is a safety net for those at risk. This program provides health coverage to millions of low-income Americans, including children, the elderly, and people with disabilities. Your state has its own eligibility standards, but the primary oversight of the program is in the hands of the feds.

Medicaid is meant to help people who don’t have the resources to pay their own way. So, if you have money, you’re supposed to pay for your care. Each state sets the number of assets you can keep and still qualify for aid — it’s usually about $2,000, and your income has to be lower than the cost of your care. The good news is your spouse can continue living in your home, even if Medicaid is paying for your stay in a nursing home. Other details of what you can keep while getting Medicaid benefits to vary by state. Check out www.cms.hhs.gov/MedicaidEligibility for information about the rules in your state.

Medicaid covers the following services — and many more — for eligible people.

• inpatient and outpatient hospital services
• physician services
• nursing facility services for people 21 and older
• home health care for people eligible for skilled nursing services
• lab and X-ray services
• rehabilitation and physical therapy, in some states
• prescribed drugs and prosthetic devices, in some states

If you qualify for both Medicare and Medicaid, you are “dual eligible.” This means most, or perhaps all, of your health care costs will be covered. Medicaid will pay for your Medicare Part A and Part B premiums, copayments, and deductibles — even some Part D drug costs. To find out if you’re eligible for Medicaid, contact your state’s program.

Low-income seniors who earn a little too much to qualify for Medicaid are a special case. They may be able to enroll in the Medicare prescription drug policy but not have to pay monthly premiums or a deductible. They may also get incredible discounts on their medication.