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What’s the difference between Medicaid and Medicare?

Medicaid and Medicare are two pillars of the American healthcare system — here’s a guide to both.

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In 1965, Congress created two ground-breaking programs to provide health insurance for Americans in need: Medicaid and Medicare. And while their names might sound almost the same, they are distinct programs with key differences.

Medicare covers a wide range of health services and is set up in a similar way to Social Security. It’s a federal program to which individuals contribute through their taxes and can then access once they turn 65. Since 1972, it’s also been available to individuals with disabilities who receive Social Security, and to individuals with end-stage renal disease. Over 60 million Americans use Medicare.

Medicaid, on the other hand, provides access to health insurance to low-income Americans, and with it, a range of health services. Set up and funded as a federal-state partnership, the federal government matches state spending with no cap, ultimately covering roughly 1 in 5 Americans. But each state’s Medicaid program is different. To customize their programs, the states submit waivers to the federal government, which must approve them. As of 2017, 75 million Americans were covered by Medicaid. Not to mention, it covers nearly half of all births in America and 48 percent of children with special health care needs.

Yet the two programs aren’t always so distinct — some individuals qualify for coverage through both programs. In 2018, over 12 million people were enrolled in both programs. Medicaid actually assists almost 1 in 5 Medicare beneficiaries with their Medicare premiums and cost sharing, and provides coverage for benefits that Medicare doesn’t cover (for example, depending on the state, preventative dental services). Hence the confusion surrounding these two entities.

Together, Medicare and Medicaid are programs central to creating and cultivating a Culture of Health in which everyone has access to quality, affordable care.

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