When it comes to Medicare vs Medicaid, which healthcare plan covers people receiving disability benefits? After your disability claim’s approved, you’ll have access to two different medical insurance plans: Medicare, or Medicaid. While both offer medical coverage to disability assistance recipients, they’re very different programs with unique eligibility requirements. Plus, you aren’t necessarily automatically enrolled in either plan once you start receiving disability benefits. Here, we explain how Medicare vs Medicaid works for Supplemental Security Income (SSI) and Social Security disability insurance (SSDI) beneficiaries.
What’s the Difference Between Medicare vs Medicaid?
It’s easy to confuse the Medicare vs Medicaid programs because their names are so similar, although they’re really quite different. Each government program’s designed to provide healthcare coverage for elderly and poor Americans. And taxpayer dollars fund both programs — but when you’re comparing Medicare vs Medicaid coverage, the similarities end there.
Medicare vs Medicaid: Which Healthcare Plan Covers SSI Recipients?
Getting Medicare vs Medicaid coverage depends on which government assistance program provides your monthly disability checks. If you’re getting SSI benefits, you’re also automatically enrolled in the Medicaid program unless you live in:
- New Hampshire
- North Dakota
- Northern Mariana Islands
If you reside in an automatic-enrollment state, there’s no waiting period for Medicaid coverage. SSI beneficiaries living in one of the states or territories listed above must submit a separate Medicaid application.
Medicare vs Medicaid: How Medicaid Works
Medicaid is a need-based joint federal and state insurance program that covers low-income individuals and families. That said, Medicaid coverage can vary significantly from state to state. That’s because the federal government covers up to 50% of each state’s Medicaid program costs. This means all remaining Medicaid program costs must be paid for at the state level.
Unlike Medicare, Medicaid isn’t available to everyone and it has very strict eligibility requirements. To qualify for Medicaid coverage, you must either already be receiving SSI benefits or fit within a mandatory eligibility group. If your financial resources aren’t limited enough to qualify for SSI, you may still qualify for state-based Medicaid assistance programs. For more information about the updated Medicaid eligibility requirements under the Affordable Care Act (ACA), visit the Medicaid.gov website.
While each state’s coverage varies (some provide optometrist services, dental benefits and physical therapy), the federal government requires that there is coverage for the following services — as long as they’re deemed “medically necessary.”
- Physician services
- Hospitalization (inpatient as well as outpatient services)
- Laboratory services
- Family planning
- Prenatal care
- Nursing facility services for those 21 or older
- Home health care nursing services for eligible patients
- Pediatric and family healthcare services
- Midwife services
- Preventive care (includes screening, diagnosis and treatment services) for children under 21
Medicare vs Medicaid: Which Plan Covers People Getting SSDI Benefits?
If you’re approved for SSDI benefits, you must wait two years after your claim’s approval date to qualify for Medicare. When Congress expanded Medicare to cover seriously disabled Americans in 1972, the law also mandated that SSDI two-year waiting period. For this reason, the Social Security Administration (SSA) isn’t likely to change that requirement anytime soon. However, the Medicare expansion law provides exceptions to this mandatory two-year waiting period for SSDI recipients who:
- Require regular dialysis or an organ transplant due to permanent kidney failure (also known as end-stage renal disease). Those SSDI claimants qualify for Medicare coverage during the third month after beginning dialysis treatments.
- Have Lou Gehrig’s disease (also known as amyotrophic lateral sclerosis, or ALS).
While that two-year waiting period sounds like a long time, it’s calculated using your original SSDI entitlement date. For most people, that means five months after the date when your disability began. (Those five months cover the waiting period before you became eligible to apply for SSDI benefits.) But if your disability started long before you applied for SSDI, that time counts toward your mandatory two-year waiting period.
In addition, individuals with very low income and assets may qualify for Medicaid during the two-year Medicare waiting period. Check Medicaid eligibility qualifications by state, or speak to a disability advocate about qualifying for local healthcare assistance programs.
How Medicare Works
Medicare is an insurance program that you pay into through a 2.9% tax on each paycheck (you and your employer each pay 1.45%). Medicare provides coverage for Americans who:
- reach full retirement age
- become too disabled to work (after the mandatory two-year waiting period)
Here’s how Medicare payments work: Essentially, your Social Security taxes go into a trust fund that grows throughout your working years. Money from that trust fund then pays all eligible bills incurred by people covered under the Medicare program. The program doesn’t have any income limits, but your monthly Medicare premiums are often automatically deducted from your SSDI checks. Some states help Medicare patients pay their annual deductibles, drug co-pays and monthly premiums. Learn more about getting extra financial assistance paying your Medicare prescription drug costs.
What Do the Different Medicare Components Cover?
Medicare has three different components, and every recipient isn’t necessarily entitled to use all of them:
- Hospital: Medicare Part A provides hospitalization coverage as well as paying some hospice, nursing home and home health care costs.
- Medical: Medicare Part B works like most private insurance policies and covers doctor’s visits, lab work, and visits to the emergency room.
- Prescription Drugs: Medicare Part D helps cover prescribed medication costs. Medicare Part A and B participants are eligible for Part D (or you can purchase it as a standalone plan).
You May Qualify for Legal Assistance
Figuring out which healthcare plan will cover you can be confusing — especially if you haven’t yet filed your disability claim. A local disability advocate can walk you through Medicare vs Medicaid coverage available in your state. It’s almost impossible to tell whether you’re eligible for healthcare assistance programs without first knowing your individual circumstances and location.
Ready to see if you may qualify? Click the button below to start your free online benefits evaluation now!
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Lori Polemenakos is Director of Consumer Content and SEO strategist for LeadingResponse, a legal marketing company. An award-winning journalist, writer and editor based in Dallas, Texas, she's produced articles for major brands such as Match.com, Yahoo!, MSN, AOL, Xfinity, Mail.com, and edited several published books. Since 2016, she's published hundreds of articles about Social Security disability, workers' compensation, veterans' benefits, personal injury, mass tort, auto accident claims, bankruptcy, employment law and other related legal issues.