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What is the difference between Medicare and Medicaid?

Medicare is a federal health insurance program for individuals who are 65 years of age or older, or who are disabled. It was intended to address the high cost of medical care that seniors face in comparison to the rest of the population. It is not a need-based program, but rather one that is based on entitlement. An individual is entitled to Medicare because that person or that person’s spouse paid for their use of the program through Social Security taxes. Individuals disabled prior to age 22 may be able to claim Medicare on the earnings record of a disabled, retired or deceased parent. Under Medicare Part A, an individual can receive basic coverage for staying in a hospital, a nursing facility at the end of the hospital stay, and home health care. Medicare Part B covers physician visits, laboratory tests, preventive services and some out-patient medical services such as medical equipment and supplies, home health care, and physical therapy. Medicare Part C, also known as Medicare Advantage Plans, offer coverage for the above services through a private insurance company. Medicare Part D is prescription drug coverage that can help to defray the cost of prescription medications.

Medicaid is a joint federal and state benefit program that covers low-income people. Some people are eligible for both Medicare and Medicaid. Medicaid is administered at the state level and each state has different rules that apply. Medicaid offers certain mandatory benefits such as inpatient and outpatient hospital services, nursing facility services, home health services, physician services and laboratory and x-ray services. States have the option of covering additional services such as prescription drugs, physical and occupational therapy, preventive services, dental services, personal care, home health services for chronic conditions and hospice.

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