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Medicare and Medicaid in the United States of America


Medicare and Medicaid are public-sponsored health programs in the United States of America (Ng, Harrington & Kitchener, 2010). The aim of the programs is to ensure that the poor, the disabled, and the elderly can access long-term health care. There are similarities and differences that are based on aspects of implementation and the design of the two programs. For instance, the origins of the two programs were not similar. In addition, the populations targeted by the programs were added at different times. According to Ng, et al. (2010), the inclusion of the beneficiaries was influenced by the increased medical expenses that the targeted groups could not meet. The following paper analyzes the differences between Medicaid and Medicare.

Medicaid and Medicare

Medicare was enacted in 1965 as a basic protection program and was later extended to cover all elderly people. On the other hand, Medicaid is an insurance cover targeting low-income people and the elderly. The Medicare program is designed in a manner that makes it an entitlement program (Ng et al., 2010). This implies that every U.S citizen who is 65 years is enrolled in the program. The other groups included in the Medicare program are persons with permanent disabilities and those suffering from chronic kidney failure. The eligibility to the Medicaid program is strictly based on the guidelines outlined for income and assets.

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Medicare is coordinated by the federal government while Medicaid is coordinated by both the state and the federal governments. The implication is that each state has its Medicaid system. The federal government participates to ensure that the states’ Medicaid systems conform to the federal guidelines. In addition, the federal government participates by funding about 50% of the costs incurred in the Medicaid program.

The other major difference between Medicaid and Medicare relates to the planning of long-term care. The Medicare program does not cover nursing home care whereas Medicaid covers nursing home care for up to 100 days of the skilled nursing services. According to Segal et al. (2014), Medicare is designed in a manner that ensures that it covers short-term post-care accorded to the elderly and disabled people after hospitalization. To be eligible for post-care, the elderly and the disabled individuals must be in need of skilled care and specialized treatment services for a short term. According to Ng et al. (2010), 32 million beneficiaries used Medicare services in 2007. Out of the population, 15% benefited from short-term post-care services.

Medicare also covers hospice benefits (Segal et al., 2014). The benefits include end-of-life costs in nursing homes, residential places, and at home. Furthermore, Medicare covers acute care costs and long-term health care needs. Ng et al. (2010) noted that Medicare incorporates medical insurance that covers various costs. The common costs covered include outpatient medical bills, doctor’s fees, the costs of home therapies, and laboratory services. According to Grabowski (2008), Medicaid also provides comprehensive inpatient and outpatient healthcare coverage to enrolled citizens. However, it does not cover the costs of prescribed drugs and diagnostic services. The Medicaid health coverage is not standardized across the U.S., eligibility and the coverage varies from state to state.

Another difference relates to the cost-sharing rules used in the two programs. In the cases of dual eligible individuals, some states have designed Medicaid to ensure Medicare maximization (Segal et al., 2014). The maximization leads to home care costs being shifted to Medicare. This has made Medicare be a primary financier while Medicaid has become a secondary payer in the cases of dual-eligible beneficiaries.


The differences between Medicare and Medicaid relate to aspects of implementation and design. For example, the eligibility and coverage for Medicaid differ from state to state. This is unlike the Medicare eligibility requirements that are standardized across the U.S. In long-term care, Medicare covers the hospital stay and post-hospital care. The post-care is normally on a short-term basis. The eligible individual must be in need of skilled nursing and therapeutic care. On the other hand, Medicaid covers the skilled nursing services for home care for up to 100 days.