Is Your Loved One on Medicaid or Medicare? Know the Differences to Get the Right Care

If you care for a loved one, do you know what health insurance they have and what it covers?

Although Medicaid and Medicare are both government health insurance programs, they have different purposes as well as different requirements for coverage and eligibility. One important difference between Medicaid and Medicare is who is eligible. With Medicaid, your care recipient’s eligibility is based on their income and assets; age isn’t a factor. With Medicare, income and assets don’t come into it at all. Medicare eligibility is based on age, although certain disabilities and health conditions also qualify. 

Let’s figure out which program your loved one is using and what they may qualify for so you can focus on what matters: caring for them. Like any new skill, providing person-centered care takes practice — but it’s worth it.

What is Medicaid?

Medicaid provides health coverage for people with low income and limited resources, and it’s paid for by both the federal government and the states. Each state runs its own program, but they all follow general rules set by the federal government. Medicaid recipients can include children, pregnant women, older adults, and people with disabilities. Medicaid programs and eligibility requirements may vary from state to state, but they will all follow the same federal benefit guidelines.

Medicaid typically covers doctor visits, hospital stays, preventive care and long-term care services, such as care within nursing facilities. In addition, all 50 states offer personal care services through Medicaid, but specific details like eligibility requirements, service types and funding levels can vary.  

Medicaid Waiver Programs

For some families, Medicaid offers additional support through Home and Community-Based Services (HCBS) waivers. These waivers allow eligible care recipients to get support and services in their own home or community, rather than in a nursing home. By promoting independent living, HCBS waivers can be a crucial resource for caregivers and loved ones alike.

HCBS waivers are different in each state and can cover a wide range of services, including:

• Personal care assistance
• Home modifications to improve accessibility
• Meal delivery
• Respite care to give family caregivers a break
• Adult day care services

Most states use HCBS waivers to pay family caregivers, but your care recipient needs to meet specific requirements to qualify.

If you’re ready to explore ways to get paid for caregiving, the AARP Foundation Paid4Care™ hub is a good place to start. You can check if your loved one is eligible and boost your caregiving skills.

If your loved one doesn’t qualify for Medicaid, see if they’re eligible for a Medicare Savings Program, which can help pay for premiums, deductibles and copays — potentially saving them thousands of dollars each year.

What is Medicare?

Medicare is individual health insurance through the federal government. People qualify for it based on their age or on certain disabilities and health conditions, such as end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS, also known as Lou Gehrig’s disease). 

 Medicare has several different parts, which can be confusing. Here’s a breakdown:

• Part A (Hospital Insurance) covers care received in a hospital, rehabilitation center, psychiatric hospital, addiction treatment center, or skilled nursing facility, as well as hospice and some home health care. Most people don’t pay a premium for Part A.
• Part B (Medical Insurance) covers medical services that Part A doesn’t cover, like a doctor’s care, outpatient care (where the patient doesn’t stay overnight), preventive services (such as flu shots), medical supplies, and some home health care. 

Parts A and B together are known as “original Medicare” (sometimes called “traditional Medicare”), and both parts are offered through the federal government. 

The other parts of Medicare are offered by private insurance companies that have been approved by the federal government. In other words, the government itself doesn’t provide the coverage.

• Part C (Medicare Advantage) combines Parts A and B, usually includes prescription drug coverage, and may offer extra benefits like vision and dental. Medicare Advantage plans have provider networks, so you may want to check to see if your loved one’s doctors are in that network.

• Part D (Prescription Drug Coverage) helps cover the cost of prescription drugs. It’s run by Medicare-approved private insurance companies, so monthly costs and covered medications will vary from plan to plan.
• Medigap (Medicare Supplemental Insurance) plans help pay some of the out-of-pocket costs not paid by original Medicare (Parts A and B), such as deductibles and copays. Medigap has a complicated set of rules, so you want to pay attention to the best time to enroll and select the best plan for your loved one’s needs.

Medicare Coverage

Medicare covers a wide range of health care services, but you may find some gaps in its coverage depending on your loved one’s needs. Here are some examples of what Medicare may cover. Please know that this is not a comprehensive list:

Original Medicare Typically Covers	Original Medicare Usually Doesn’t Cover
Hospital stays	Long-term care; custodial care
Doctor visits	Most dental care
Preventive services	Routine eye exams for glasses
Some home health care	Hearing aids and exams for fitting them
Durable medical equipment (walkers, wheelchairs, etc.)	Most care outside the U.S.
Skilled nursing facility care (limited to 100 days following a hospital stay of three full days)	Cosmetic surgery

It’s important to understand that there could still be out-of-pocket costs like deductibles, copays and coinsurance, even for covered services.

Dual Eligibility

Some people, known as “dual eligibles,” qualify for both Medicare and Medicaid. This can provide more comprehensive coverage and financial protection. 

For dual eligibles:

• Medicare pays first for covered services.
• Medicaid can help cover Medicare premiums, deductibles and copays.
• Medicaid may provide additional benefits not covered by Medicare, such as long-term care.

Key Differences

Medicare and Medicaid have their own rules. Understanding the differences can help you make more informed decisions about your loved one’s care.

Medicaid	Medicare
Eligibility: Based on income and assets	Eligibility: Based on age (65 and up) or disability
Long-term care coverage: Comprehensive, including nursing home care	Long-term care coverage: Limited (up to 100 days of skilled nursing)
Cost to beneficiary: Little to no cost for people who qualify	Cost to beneficiary: Premiums, deductibles and copays (some assistance available)
Caregiver support: May offer compensation through waiver programs	Caregiver support: Limited

Figuring Out Your Loved One’s Insurance

If you aren’t sure whether your loved one has Medicaid, Medicare or both, take a look at their insurance card. 

• Medicaid cards look different in every state, but they often include the state name and a Medicaid or member ID number.
• Medicare cards are red, white and blue. They list whether your loved one receives Medicare Part A, Part B or both, along with the date their coverage started.
• Medicare Advantage cards vary in appearance, but they usually show the insurance company’s logo and the plan’s ID number.

Still not sure? Call 1-877-839-2675 to connect with your local SHIP (State Health Insurance Assistance Program) for personalized guidance or visit shiphelp.org.

Knowing what insurance your loved one uses will help you make sure they get the benefits and care they qualify for and deserve.