Posted: January 17, 2020
Last updated date: April 02, 2021
Medicaid and Medicare. It’s hard to think of two words that cause as much confusion.
- What’s the difference between these two government health insurance programs?
- What exactly are Medicaid and Medicare?
- Who’s eligible to get Medicaid or to get Medicare?
- And how can some people get both?
Read on to find out the answers to these questions and more.
Everything you need to know about Dual Special Needs Plans in one, convenient guide.
The difference between Medicaid and Medicare.
The difference between Medicaid and Medicare is that Medicaid is managed by states and is based on income. Medicare is managed by the federal government and is mainly based on age. But there are special circumstances, like certain disabilities, that may allow younger people to get Medicare.
Medicaid is a way to get health care at a lower cost or sometimes at no cost to you. Medicaid is managed by each state, so the eligibility requirements can change from state to state. Your state may even have its own name for its Medicaid program. It’s important to remember that you have to recertify for Medicaid each year.
Medicaid typically covers:
- Children
- Pregnant women
- Elderly adults and people with disabilities
- Eligible low-income adults
Medicare is a national health insurance program run by the federal government. Medicare covers:
- People age 65 and older.
- Some people under age 65 who may qualify due to a disability or another special situation.
Medicare helps millions of American seniors and disabled individuals cover some of their health care costs. There are 4 different parts to Medicare. This helps give people more health care choices, so they can pick the health care plan that best meets their needs.
FYI: Parts A and B are also known as “Original Medicare.”
Helps pay for hospital stays and inpatient care.
Helps pay for doctor visits and outpatient care.
Private insurance companies offer other types of Medicare plans with extra benefits that go beyond Original Medicare:
Combines Part A (hospital insurance) and Part B (medical insurance) in one plan that often includes prescription drug coverage too.
Prescription drug coverage.
How can you get both Medicaid and Medicare?
Some people qualify for Medicare because of age (they’re age 65 or older) or due to having a disability. They’re also eligible for Medicaid because they meet the requirements to qualify for Medicaid in their state. These people are “dual eligible” because they’re eligible for both Medicaid and Medicare.
What are dual health plans?
Dual health plans are designed just for people who have both Medicaid and Medicare. They’re a special type of Medicare Part C (Medicare Advantage) plan. Dual health plans combine hospital, medical and prescription drug coverage. You’ll keep all your Medicaid benefits. Plus, you could get more benefits than with Original Medicare. And you could get it all with as low as a $0 plan premium.
View the "Do I Lose My Medicaid Benefits?" article.
What are dual special needs plans?
Dual health plans are also known as dual special needs plans. They’re offered by private insurance companies, so you can find a dual health plan that best meets your health insurance needs. Being on a dual health plan does not change your Medicaid eligibility or benefits.
Dual-eligible or Medicaid plan benefits can change depending on where you live. Search using your ZIP code to find the best plan to meet your health care needs.
An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance. Once earned, the premium is income for the insurance company. It also represents a liability, as the insurer must provide coverage for claims being made against the policy. Failure to pay the premium on the individual or the business may result in the cancellation of the policy.
- An insurance premium is the amount of money an individual or business must pay for an insurance policy.
- Insurance premiums are paid for policies that cover healthcare, auto, home, and life insurance.
- Failure to pay the premium on the part of the individual or the business may result in the cancellation of the policy and a loss of coverage.
- Some premiums are paid quarterly, monthly, or semi-annually depending on the policy.
- Shopping around for insurance may help you find affordable premiums.
When you sign up for an insurance policy, your insurer will charge you a premium. This is the amount you pay for the policy. Policyholders may choose from several options for paying their insurance premiums. Some insurers allow the policyholder to pay the insurance premium in installments—monthly or semi-annually—while others may require an upfront payment in full before any coverage starts.
The price of the premium depends on a variety of factors, including:
There may be additional charges payable to the insurer on top of the premium, including taxes or services fees.
For example, in an auto insurance policy, the likelihood of a claim being made against a teenage driver living in an urban area may be higher than a teenage driver in a suburban area. In general, the greater the risk associated, the more expensive the insurance policy (and thus, the insurance premiums).
In the case of a life insurance policy, the age at which you begin coverage will determine your premium amount, along with other risk factors (such as your current health). The younger you are, the lower your premiums will generally be. Conversely, the older you get, the more you pay in premiums to your insurance company.
Insurance premiums may increase after the policy period ends. The insurer may increase the premium for claims made during the previous period if the risk associated with offering a particular type of insurance increases, or if the cost of providing coverage increases.
Insurance companies generally employ actuaries to determine risk levels and premium prices for a given insurance policy. The emergence of sophisticated algorithms and artificial intelligence is fundamentally changing how insurance is priced and sold. There is an active debate between those who say algorithms will replace human actuaries in the future and those who contend the increasing use of algorithms will require greater participation of human actuaries and send the profession to a "next level."
Insurers use the premiums paid to them by their customers and policyholders to cover liabilities associated with the policies they underwrite. They may also invest in the premium to generate higher returns. This can offset some costs of providing insurance coverage and help an insurer keep its prices competitive.
While insurance companies may invest in assets with varying levels of liquidity and returns, they are required to maintain a certain level of liquidity at all times. State insurance regulators set the number of liquid assets necessary to ensure insurers can pay claims.
Most consumers find shopping around to be the best way to find the cheapest insurance premiums. You may choose to shop around on your own with individual insurance companies. And if you are looking for quotes, it's fairly easy to do this by yourself online.
For example, the Affordable Care Act (ACA) allows uninsured consumers to shop around for health insurance policies on the marketplace. Upon logging in, the site requires some basic information such as your name, date of birth, address, and income, along with the personal information of anyone else in your household. You can choose from several options available based on your home state—each with different premiums, deductibles, and copays—the policy coverage changes based on the amount you pay.
The other option is to try going through an insurance agent or broker. They tend to work with a number of different companies and can try to get you the best quote. Many brokers can connect you to life, auto, home, and health insurance policies. However, it's important to remember that some of these brokers may be motivated by commissions.
Insurers use the premiums paid to them by their customers and policyholders to cover liabilities associated with the policies they underwrite. Some insurers invest in the premium to generate higher returns. By doing so, the companies can offset some costs of providing insurance coverage and help an insurer keep its prices competitive within the market.
Insurance premiums depend on a variety of factors including the type of coverage being purchased by the policyholder, the age of the policyholder, where the policyholder lives, the claim history of the policyholder, and moral hazard and adverse selection. Insurance premiums may increase after the policy period ends, or if the risk associated with offering a particular type of insurance increases. It may also change if the amount of coverage changes.
An actuary assesses and manages the risks of financial investments, insurance policies, and other potentially risky ventures. Actuaries assess particular situations financial risks, primarily using probability, economic theory, and computer science. Most actuaries work at insurance companies, where their risk-management capabilities are particularly applicable in determining risk levels and premium prices for a given insurance policy.