Medicare vs Medical
For most Americans healthcare insurance comes from private companies, however, about
a third of Americans have their insurance through a taxpayer-funded government insurance plan
like Medicare, Medicaid, the VA, and healthcare for active-duty military and their families (The
Economics of Health Care Crash Course #29, 2016). For non-military members, Medicare and
Medicaid are the only ones available to them. While Medicare and Medicaid share similarities
as government healthcare insurance plans, they also differ in many ways.
Medicare is part of the Social Security Administration and provided health insurance for
people aged 65 and older and others, such as the severely disabled, who qualify for social
security (Mitchell, Dakota; Haroun Lee, 2017, p. 502). Medicare consists of four parts: Part A
(helps pay for hospital or skilled facility), Part B (helps pay for outpatient services, like PCPs,
and medical services, like MRIs), Part C (choice of HMO or PPO), and Part D (helps pay for
prescription medications) (Mitchell, Dakota; Haroun Lee, 2017, p. 502). While Medicare is a
government healthcare insurance plan, it is not completely free. There are monthly premium
along with deductibles and coinsurance amounts (Mitchell, Dakota; Haroun Lee, 2017, p. 502).
The Medicare program is paid through the social security taxes collected from Americans
through their payroll when they were working and when activated at the age of 65 or older, the
monthly premium is automatically deducted from their social security payment. People with
Medicare can enroll in private insurance supplement called Medigap policy to help pay for
deductibles and coinsurances (Mitchell, Dakota; Haroun Lee, 2017, p. 502).
Medicaid is also government healthcare insurance plan for the American people. Unlike
Medicare whose requirements are based on age and health disability, Medicaid is a costassistance program to help pay the medical costs for those with low level incomes (Mitchell,
Dakota; Haroun Lee, 2017, p. 502). Therefore, a person can be enrolled in both Medicare and
Medicaid program at the same time. While the Medicaid program is designed for to help those
with limited incomes to prevent Americans becoming uninsured, the reality of the situation is a
little different. Many uninsured work part-time jobs that put their income level above the
Medicaid program threshold, but unable to get health insurance from their workplace or afford
the monthly payment of personal health insurance (The Economics of Health Care Crash Course
#29, 2016). This program is funded by the federal government through taxes but operated at the
state level by departments of human services (i.e., Medi-Cal). Each state determines their own
eligibility for the program and medical payment procedures (Mitchell, Dakota; Haroun Lee,
2017, p. 502). Because this healthcare insurance plan designed for people with low level
income, so unlike Medicare, there are usually low or no monthly premium, very few deductibles
and very few coinsurances.
Both Medicare and Medicaid are taxpayer-funded government insurance plan but they
requirement for enrollment, level of operation, and even government funding are different. The
requirements for enrollment of Medicare is based on the person’s age or health disability, while
for Medicaid it is based solely on the person’s income. Therefore, if that person’s income
increased above Medicaid threshold, they will lose their Medicaid insurance. The same is not
true for Medicare, which enrollment is mostly permanent. Second, Medicare is operated by the
Social Security Administration, which is a federal program, but Medicaid is operated by each
individual state and have different eligibility and payment procedures. In California, the
Medicaid program is known as Medi-Cal. Lastly, while funding for both programs comes from
the government, Medicare is part of the Social Security Administration and its funding is
collected from people’s federal income tax and therefore payment is also from the federal
government. However, Medicaid is funded by a partnership between the state and the federal
government and funding for this program is from both federal and state taxes.
Bibliography
1. Youtube.com. 2016. The Economics of Health Care Crash Course #29. [online]
Available at: <https://www.youtube.com/watch?v=cbBKoyjFLUY> [Accessed 28 April
2022].
2. Mitchell, Dakota, and Lee Haroun. Introduction to Health Care. Fourth Edition ed.,
Boston, MA, Cengage Learning. Accessed 28 Apr. 2022.