Medicaid and Medicare
Medicare and Medicaid can be confusing to many people. Here is a brief overview of both programs. If you have additional questions, please select one of the Quick Links at the bottom of this page for more detailed information available on government sites.
- Medicaid is a joint and voluntary program between the federal government and the states, with the mission to provide health insurance coverage to the nation's poor, disabled and the impoverished elderly people. The federal government sets minimum eligibility standards and coverage requirements for Medicaid. Because Medicaid is an entitlement program, states choosing to participate must provide specified care to everyone who is eligible under guidelines developed by the federal government.
- Currently, a matching program is in place with the federal government using a formula measuring per capita income in each state relative to a national average. By law, matches must be at least 50 percent for medical assistance payments and normally cannot exceed 83 percent. Match rates for administrative costs run from 50 percent to 100 percent.
- Medicaid is facing a funding crisis for the following reasons:
- Costs associated with the program (particularly prescription drug costs) continue to rise
- During more lucrative years, some states looked to Medicaid as a way to expand health coverage for the working poor and others without access to health insurance, expanding eligibility criteria.
- During economic downturns more individuals become eligible thereby increasing demands for funding and services.
- The growing population of people in need of long-term care.
As a result of the funding crisis, several critical health programs are being reduced or eliminated, provider reimbursement rates are being frozen, and program eligibility is also being adjusted. Dental benefits have been a target, 17 states are reducing or eliminating adult dental benefits in 2002-2003 (as of February 2003).
Who is covered?
To qualify for Medicaid, an individual must meet financial criteria or may be a member of a group that is "categorically eligible" for the program, such as low-income children, pregnant women the elderly, people with disabilities and parents. Federal law mandates coverage of some groups below specified minimum income levels, but also gives states broad optional authority to extend Medicaid eligibility beyond these minimum standards. The flexibility that states have to establish their own eligibility rules has produced wide state-to-state variation in who and how many are covered by Medicaid.
What does Medicaid pay for?
Medicaid covers a broad range of services to meet the complex needs of the populations it serves, particularly the elderly and people with disabilities. Because Medicaid beneficiaries have limited financial resources, cost-sharing is limited and not permitted for children and pregnant women.
- State Medicaid programs must cover the following:
- Inpatient and outpatient hospital services
- Physician, midwife & certified nurse practitioner services
- Laboratory and x-ray fees
- Nursing home and home health care
- Early and periodic screening, diagnosis, and treatment (EPSDT) for children under 21
- Family planning
- Rural health clinics/federally qualified health centers
States have the authority to cover additional, optional services and receive federal matching funds.
Early and Periodic Screening, Diagnosis and Treatment (EPSDT) Information
EPSDT services are required for the categorically qualified under age 21, but optional for medically needy (those who qualify as a result of high medical expenses that reduce income below a state's AFDC limit).
Required EPSDT Dental Services
Screening services provided at intervals meeting reasonable dental standards, and at such other intervals to determine illness and which shall, at a minimum, include dental services that are provided at intervals meeting reasonable dental standards and at other intervals as medically necessary to determine the existence of illness, and which shall, at a minimum, include relief of pain and infections; restoration of teeth; and maintenance of dental health. Although an oral screening may be a part of a physical examination, it does not substitute for examination through direct referral to a dentist. A direct oral referral is required for every child in accordance with a state's periodicity schedule
and at other intervals as medically necessary.
Includes: services necessary to control bleeding, relieve pain, eliminate acute infection; operative procedures which are required to prevent pulpal death and the imminent loss of teeth; treatment of injuries to the teeth or supporting structures; palliative therapy for pericoronitis associated with impacted teeth.
Includes: instruction in self-care oral hygiene procedures; cleanings; sealants when appropriate to prevent pit and fissure caries.
Includes: pulp therapy for permanent and primary teeth; restoration of carious permanent and primary teeth with silver amalgam, silicate cement, plastic materials and stainless steel crowns; scalings and curettage; maintenance of space for posterior primary teeth lost permanently; and provision of removable prosthesis when masticatory function is impaired or when existing prosthesis is unserviceable; and orthodontic treatment when medically necessary to correct handicapping malocclusion.
Nursing facilities must provide routine dental services (to the extent they are covered under the state plan) and emergency dental services to meet the needs of each resident.
Any additional services provided are at the convenience of the state. To qualify as a state plan for medical assistance, the state plan must:
- Be uniformly applied to all political subdivisions of the state
- Provide for financial participation by the state equal to not less than 40 percent
- Provide a fair hearing for any individual whose claim is denied or not timely processed
- Provide for proper administration of the plan
- Designate a single state agency to administer the plan
- Submit reports to the Secretary of HHS as required
- Provide privacy safeguards for applicants
- Provide a fair opportunity for all individuals to apply
- Provide certain statutorily defined medical services, etc.
States may apply (and many have) for a federal waiver to make state-specific adjustments to many of these requirements. Check with your state for specific details.
The Centers for Medicare & Medicaid Services (CMS) administers Medicare, the nation's largest health insurance program, which covers nearly 40 million Americans. Medicare is a Health Insurance Program for people 65 years of age and older, some disabled people under 65 years of age, and people with End-Stage Renal Disease (permanent kidney failure treated with dialysis or a transplant).
Medicare is a Health Insurance Program for:
- People 65 years of age and older.
- Some people with disabilities under age 65.
- People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).
Medicare has Two Parts:
- Part A - Hospital Insurance - Most people do not have to pay for Part A.
Helps Pay For: Care in hospitals as an inpatient, critical access hospitals (small facilities that give limited outpatient and inpatient services to people in rural areas), skilled nursing facilities, hospice care, and some home health care.
Cost: Most people get Part A automatically when they turn age 65. They do not have to pay a monthly payment called a premium for Part A because they or a spouse paid Medicare taxes while they were working.
If you (or your spouse) did not pay Medicare taxes while you worked and you are age 65 or older, you still may be able to buy Part A. If you are not sure you have Part A, look on your red, white, and blue Medicare card. It will show "Hospital Part A" on the lower left corner of the card. You can also call the Social Security Administration toll free at 1-800.772.1213 or call your local Social Security office for more information about buying Part A. If you get benefits from the Railroad Retirement Board, call your local RRB office or 1-800.808.0772.
- Part B - Medical Insurance - Most people pay monthly for Part B.
- Helps Pay For: Doctors' services, outpatient hospital care, and some other medical services that Part A does not cover, such as the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.