Medicare and Medicaid are both government-funded health care programs in the United States, but they work differently, and are intended to serve different populations of Americans. Both, however, are overseen by the Centers for Medicare and Medicaid Services (CMS), which also oversees the Children's Health Insurance Program (CHIP), another government health care program. Understanding the difference between these programs can be important for people who need their services.
Medicare and Medicaid were established in 1965 under the Social Security Act, to address growing concerns about American seniors and Americans living in poverty. Historically, these populations often struggled to obtain and pay for health care, because they lacked the ability to pay. The Social Security Act was designed to protect these vulnerable populations in the United States, providing benefits such as Social Security payouts to seniors to supplement retirement, and health care services to seniors and people living in poverty.
Medicare is an entitlement program funded entirely by the federal government. Every American over age 65 is eligible for Medicare services, providing that he or she paid taxes into the Social Security fund. Certain people with disabilities are also eligible for coverage under Medicare. Several different Medicare programs including Medicare Part A for hospital care, Medicare Part B for medical care, and Medicare Part D for prescription drugs, are designed to provide complete coverage. People may be obligated to pay deductibles and copays for certain services provided by Medicare, and Medicare also reserves the right to refuse to pay for treatments it does not deem necessary.
Medicaid, on the other hand, is administered primarily by the states, although it is overseen by CMS. Funding for Medicaid comes in part from the federal government, and in part from the individual states. This program is a means-tested state level form of health care which is designed to provide care for people who meet the requirements for Medicaid coverage. People must apply for Medicaid, and demonstrate that they have a proved need. Standards for coverage under Medicaid vary by state, as do the services available; some states, for example, provide dental services, while others do not.
Some Americans are eligible for coverage under both Medicare and Medicaid; low income is a common situation for seniors and people with disabilities and this can result in dual coverage. Funding problems have plagued both Medicare and Medicaid, raising concerns about how sustainable these programs are, and whether or not care will be available to future generations, including working Americans currently paying Social Security taxes.
