If you have ever wondered about the differences between Medicare and Medicaid, you are not alone. Even those who are receiving benefits from one or both programs can get confused.
Before you start thinking that these federal programs cannot help you or your loved ones, read this brief overview.
What is Medicare?
Medicare is a federally operated insurance program that people pay into with payroll or self-employment taxes. Anyone who is over the age of 65, regardless of income level, may receive Medicare coverage. People with severe disabilities may also receive benefits. Like most health insurance policies, there are monthly premiums and yearly deductibles based on the plan chosen.
What is Medicaid?
While Medicaid is another federal program, each state is responsible for its administration. The program is designed to help cover medical expenses for those who meet certain eligibility criteria, including children and parents as well as those ages 65 and older. The greatest difference between Medicare and Medicaid is that Medicaid provides coverage for long-term healthcare services and support.
Who is eligible for Medicaid?
While eligibility for Medicaid is based on income, it is not just for those with low incomes. Even people with nearly $1 million in assets can -- and should -- apply for benefits in certain circumstances. Here's why:
The average monthly cost for nursing home care in Colorado is more than $7,800. In the Denver area, it can cost between $9,000 and $10,000 per month. At that rate, even a millionaire can go broke in less than 10 years.
Medicaid was designed to allow people of many income levels to afford quality nursing care. There are also provisions that allow healthy spouses to retain assets and income on which to live.
Colorado rules may be slightly different from other states. This is why it is important to consult a professional from your area -- or where your loved one lives -- when you have questions.