Medicare is a federally administered program that provides
hospital and medical insurance protection to people aged 65 and
older, disabled people under age 65 who receive cash benefits
under Social Security or Railroad Retirement programs, and people
of all ages with chronic kidney disease. Since 1973, aliens and
some federal civil service employees and annuitants have been
eligible to enroll by paying a monthly premium.
Medicare consists of two parts: Part A and Part B. Part A
is compulsory hospital insurance (HI), financed by contributions
from employees, employers, and participants. HI pays for hospital,
nursing home, home health and hospice service. Part B is voluntary
supplemental medical insurance (SMI), financed by payments from
those who enroll in it. SMI covers physicians' services and a
variety of other goods and services.
Medicare has been generally successful in assuring broad and equitable
access to health care for the elderly. When the program began,
the poor and non-white elderly received substantially less medical
care than did the wealthier or white elderly. But, these disparities
have been substantially reduced.
Medicaid eligibility is much more complex than Medicare. Medicaid
is a welfare program, and every applicant must show that his/her
income falls below certain levels set by states according to federal
guidelines. Eligibility varies significantly among the 56 state
and territorial Medicaid programs.
How does it Work?
Medicaid is administered by each state according to federal
requirements and guidelines, and is financed from both state and
federal funds. It provides medical assistance to people eligible
for cash assistance programs such as Aid to Families with Dependent
Children (AFDC) and Supplemental Security Income (SSI). States
have broad discretion in covering different groups under their
Medicaid program. To be eligible for federal funds, the program
must provide for individuals receiving federal aid.
The government also provides health coverage to federal civilian
employees, veterans and Native Americans.