Medicare and Medicaid: the basics

Medicare vs. Medicaid

Medicare is federal health insurance for people 65 and older who meet citizenship or residency requirements. Some people qualify earlier because of a disability, End-Stage Renal Disease (ESRD), or ALS (amyotrophic lateral sclerosis, also called Lou Gehrig's disease).

Medicaid is run jointly by the federal government and each state. It provides free or low-cost coverage to eligible people with limited income, including families and children, pregnant women, older adults, and people with disabilities. States follow federal rules, but income limits, benefits, and costs differ from state to state.

The four parts of Medicare

• Part A (hospital insurance) helps cover inpatient hospital stays, skilled nursing facility care, hospice, and home health care.
• Part B (medical insurance) helps cover doctor visits, medical equipment like wheelchairs and walkers, and many preventive services like screenings and vaccines.
• Part C (Medicare Advantage) is a private plan approved by Medicare that bundles Part A, Part B, and usually Part D.
• Part D helps cover prescription drugs. Private insurance companies run these plans under Medicare's rules.

Original Medicare or Medicare Advantage

When you first sign up, and at certain times each year, you choose how to get your coverage.

• Original Medicare is Part A and Part B. You can use any doctor or hospital that takes Medicare. You can add a separate drug plan, and you can buy a Medigap policy to help pay your share of costs, like your 20% coinsurance.
• Medicare Advantage is an alternative run by a private plan. You may need to use the plan's network and get prior approval for some services. These plans have a yearly limit on out-of-pocket costs, and many include extras like vision, hearing, and dental.

Signing up for Medicare

If you already get Social Security retirement or disability benefits before 65, you're usually enrolled automatically. Otherwise you sign up yourself.

Your first chance is your Initial Enrollment Period: 7 months that start 3 months before the month you turn 65 and end 3 months after it. Miss it and you may have to wait for the General Enrollment Period (January 1 to March 31) and pay a late enrollment penalty for as long as you have Part B. If you're still covered by a job-based plan through your own or your spouse's current work, a Special Enrollment Period lets you sign up later without that penalty.

Applying for Medicaid and CHIP

You can apply for Medicaid and CHIP (the Children's Health Insurance Program) any time of year, either through the Marketplace or directly with your state's Medicaid agency. If you apply through the Marketplace and it looks like someone in your household qualifies, your information goes to your state, which contacts you about enrolling.

Apply even if you think your income is too high. Each state looks at more than income, including household size, pregnancy, caring for young children, disability, and age. Children may qualify for CHIP even when their parents don't qualify for Medicaid.

Having both

If you qualify for both programs, you can have Medicare and Medicaid at the same time. Medicaid can then help with costs Medicare doesn't cover, including Medicare premiums.