As a mother of identical twins, I’m often asked how I tell them apart. Are there any tricks? What are their similarities, what are their differences? As an elder law attorney, I’m often asked very similar questions, but instead of the subject being my twin daughters, clients are asking about Medicare and Medicaid. While working on an article about Medicare, it hit me. Medicare and Medicaid are fraternal twins! After a lengthy gestational period of over 60 years, they were “born” on the same day, both children of the Social Security Act. Like many twins, their names even sound alike- to the amusement and frustration of all those who know them. However, unlike identical twins who carry the same genes, Medicare and Medicaid are definitely fraternal twins, who have different characteristics and coverages. This article will highlight some common twin questions and delve a bit deeper into Medicare.
What are their names?
- Medicare– the federal health insurance program for People who are 65 or older, certain younger people with disabilities, people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD)
- Medicaid –the jointly funded, Federal-State health insurance program for low-income and needy people. It covers children, the aged, blind, and/or disabled and other people who are eligible to receive federally assisted income maintenance payments.
How can I keep them straight?
Many of our clients struggle to differentiate between these two programs. With such similar names, and some overlap in coverage, it is no wonder. It is often only when both programs come into play, and the eligibility issues come to light, that many of our clients and their families start to fully understand the difference.
It’s easy, with just this quick thought process: We CARE for everyone. We provide AID to those who need it.
What do I need to know about each of them?
Medicare- the much broader eligibility rules, with minimal financial criteria.
With very few exceptions, as long as someone (or their spouse) has paid into the Medicare system, once a person turns age 65 he or she will have Medicare as their primary health insurance. One exception would be if a person (or sometimes his or her spouse) is still working and receiving health care through an employer. Even then, Medicare would often become a secondary insurance. Financial need does not determine eligibility. Whether it is you, your neighbor down the street, or Clint Eastwood, as long as you are over 65 you would be eligible for Medicare.
When a person is nearing his or her 65th birthday, they will receive enrollment information from Medicare. At that time, a person can choose the Medicare coverage that they believe is right for them.
Medicare was not designed to cover everything; it was intended to provide basic health insurance. Medicare originally had two parts, A and B. Part A was the inpatient, hospital coverage. Part B was outpatient, focusing on office visits, tests, labs and equipment. Most people had a supplemental or Medigap secondary insurance that picked up the copays and deductibles Medicare did not cover. Medicare does not come without a cost. For most people, Medicare Part A is provided at no cost if the person (or their spouse) has paid into the Medicare system during their working years. Medicare Part B has a monthly premium, which varies, but is roughly $134/month for most people.
Medicaid- strict eligibility rules, based primarily on financial need.
Medicaid, on the other hand, has a complex, and constantly changing set of rules and regulations, based on Federal and State law. Income, assets, age, and health conditions are all relevant when determining Medicaid eligibility. Medicaid even varies state by state. Clearly, this is its own article, and yes, as you expected, Medicaid will be a focus in our next newsletter.
Did you know you were having twins?
Perhaps at some points in time during the many years that lead up to the birth of Medicare and Medicaid, people may have suspected that two programs would be created. However, it was not obvious from the start.
If you’re a history buff like I am, you might find it interesting to know that the seeds of our current Medicare and Medicaid programs actually go back to the social progressive movements of the late 1800s. Momentum for more governmental protections, including health insurance was also embraced as a focus during the labor movements in the early 1900s. The movement soon became political, and in 1912, Theodore Roosevelt, the Progressive Party Candidate, endorsed a platform that included social insurance measures, including health care. However, he was unsuccessful in his bid for the presidency and soon the onset of World War I turned attention away from national health insurance. Instead, many states, including Michigan, began to take matters into their own hands and established social welfare systems.
The issue gained momentum again during the 1930s as a part of President Franklin Roosevelt’s New Deal, where it was initially included in the plans for Social Security. The provisions were later removed, after Roosevelt determined that its inclusion would jeopardize the potential of the approval of the rest of the Social Security package. While Roosevelt was generally supportive of idea of national health insurance, he chose not to champion it, rather, that task was one taken up by his successor, Harry Truman. However, Truman had limited success, he did not have Roosevelt’s persona or popularity, and the political climate had changed since the inception of Social Security and his initiative was met with strong opposition. Despite Truman’s efforts, he was unable to gather sufficient support for a national health insurance plan.
The focus on the initiative started to shift when the Social Security Administration’s 1951 annual report recommended health insurance for beneficiaries meaning people over age 65. Over the next decade, numerous unsuccessful legislative attempts were made to move forward, with none of them gaining enough support to become law. By the early 1960s, the focus was clearly established toward granting coverage toward the indigent and elderly, not the entire country. This left Congress and the President with the task of narrowing down the details. By mid-1963, details were starting to emerge, and the basics of Medicare and Medicaid were finally taking shape. Following President Kennedy’s assassination, President Johnson strongly pushed for the passage of the legislation. In July 1965 Medicare and Medicaid, both parts of the Social Security Amendments of 1965, were signed into law by President Johnson, with former President Harry Truman prominently present for the signing.
What’s unique about Medicare?
When Medicare was originally enacted, it was designed for people over age 65. A few years later, in 1972, under President Nixon, Medicare was extended to also cover persons with disabilities. For the next 25 years, Medicare remained mainly unchanged. However, beginning in 1997, the next 20 years contained significant changes. After much debate, in 1997, President Clinton signed legislation adding an option to Medicare + Choice to Medicare. Medicare + Choice was an early form of Medicare managed care. The managed care programs combined original Medicare, with some of the coverage included in the private Medicare supplemental insurances. Medicare + Choice was met with mixed success and did not catch on the way it was hoped. In 2003, after much advocacy, during George W. Bush’s presidency, Medicare Part D, prescription coverage was added and Medicare + Choice was revamped as Medicare Advantage (also called Medicare Part C). Since that time, Medicare advantage plans, which typically have less costly premiums than original Medicare with a Medigap, have been gaining popularity. In 2010, under President Obama, the Affordable Care Act (ACA) expanded Medicare to cover more preventative services and reduced the out of pocket costs under Medicare Part D. Under President Trump, to date, the changes have been relatively minor, still focusing on tweaking Medicare Part D, and continuing to reduce the out of pocket costs.
Since even before its enactment, Medicare has been a sensitive political issue. The rising costs of health care and the rising number of Medicare beneficiaries both contribute to the current financial strains on the budget. As the baby boom generation continues to become Medicare eligible, while also leaving the workforce, the challenges are not going away any time soon. Currently, the trend is heading toward privatization of Medicare, and more cost sharing, some of which is income based. Given the historically vulnerable groups that Medicare covers, it can be anticipated that Medicare will continue to be a program in which change is met with resistance and uncertainty.
As I try to do with my own twins, it’s important to recognize and appreciate the unique characteristics each of them has. Therefore, look for our next newsletter, where Medicaid will finally get my full attention!