In today’s column, I’m going to talk about Medicare, Medicaid, and Social Security. Despite what many people think, these government programs are not like three peas in a pod. They are more like a pea, a bean, and a stalk of celery. In other words, they are all sort of connected because they are government programs that sometimes have an overlapping beneficiary base. But ultimately, they are three very different programs with very different rules and very different management structures.
Before I go on, I want to share a story that will seem very disconnected from what I was just writing about. But I promise I will tie it in to the topic at hand.
About 50 years ago, when I first started working for the Social Security Administration in one of its field offices in central Illinois, part of my job had me running to local nursing homes to take care of the Social Security needs of their residents. One day, I got to chatting with the administrator of one of those nursing homes. I mentioned the music that was being piped into their sound system throughout the home. The instrumentals were big-band era groups such as the Benny Goodman and Glenn Miller orchestras. And the singers were the likes of Perry Como and Rosemary Clooney. I said something about how old-fashioned it seemed. And the administrator told me that the residents liked it because it’s the music they grew up with. And then she said: “Mark my words. Fifty years from now when our generation is in nursing homes, you will hear The Beatles and The Rolling Stones piped into our rooms.” I think I said something such as “No way that will ever happen!” (I guess I was thinking that just seemed so inappropriate. And besides, we’re never going to get old!)
Well, fast forward five decades to just a few days ago. My neighbor asked me to accompany her to a local nursing home where her brother was staying. And lo and behold, as we walked in the front door, I heard The Beatles’ “Hey Jude” playing on its sound system. Oh, my goodness! We did get old. And we took our music with us!
OK, so what does this have to do with today’s topic? Well, while at the home, my neighbor mentioned that her brother’s care was being taken care of by his Medicare coverage. I had to correct her and tell her that his nursing home care was very likely being paid for by Medicaid and not Medicare. She said she thought they were simply different parts of the same program. But they are not. And now I will explain.
But before I do, I must add this caveat. I’m a retired Social Security guy. As such, I am an expert in almost all Social Security matters. But I am definitely not an expert when it comes to Medicare and Medicaid. However, I know enough about them to give this broad-strokes overview of the programs. So that’s what’s coming.
I’m sure that all of my readers are pretty familiar with Medicare. It’s the federal health care program for seniors ages 65 and older and for people getting disability benefits. It’s managed by an agency called the Centers for Medicare and Medicaid Services (CMS). It is NOT run by the Social Security Administration (SSA), as many people think.
Why the confusion? Because the CMS does not have any local field offices, they rely on the SSA to get people enrolled in Medicare. Because of that, and because Medicare premiums come out of Social Security checks, many people think that the SSA runs Medicare. Again, they don’t. Once you are enrolled in Medicare, the SSA essentially washes its hands of your Medicare experience, and CMS takes over.
Anyway, Medicare has two basic plans. Part A, or hospital coverage, is paid for by the Medicare payroll tax deducted from a worker’s paycheck. So, it’s essentially free once you turn 65. (And by the way, even though the Social Security full retirement age has climbed to 67, the Medicare eligibility age is still 65.)
The other main Medicare plan is Part B, which pays for doctor’s visits, lab work, etc. Part B is financed by the aforementioned premium deducted from your Social Security check. The basic monthly premium is $174.70, but it can be much higher for well-to-do seniors.
I can’t tell you how many times over the years (tens of thousands of times) people have told me something such as this: “Yes, I have both parts of Medicare. I have Medicare and Medicaid.” But what they meant to say was: “I have both parts of Medicare. I have Part A and Part B.” That’s just one example of the many ways that people confuse Medicare and Medicaid.
Before I move on to a brief overview of Medicaid, I must point out that there are other parts to Medicare such as Part C (usually called Medicare Advantage Plans) and Part D, which offers prescription drug coverage. I know almost nothing about these programs, so I’m not explaining them here. I’m simply acknowledging that they exist.
So now on to Medicaid. What is it? In some past columns, I almost flippantly and offhandedly have told readers that Medicaid is like Medicare, but for poor people. And that is sort of correct, but of course there is so much more to it than that.
Briefly, Medicaid is a joint federal and state program that covers medical costs for people with limited income and resources. Because there is that state tie-in, the eligibility rules can vary from one state to another. So there is simply no way that I can explain them in a nationally syndicated newspaper column. Suffice it to say, you’ve got to be pretty darn poor to get Medicaid coverage. In fact, I’m betting that most readers of this column are getting Medicare, but very few of them are getting Medicaid.
I just said that there are state-specific eligibility rules for Medicaid. But there is one national program that includes Medicaid eligibility. And that’s the Supplemental Security Income (SSI) program. SSI is a federal welfare program that pays a small monthly stipend (rarely more than about $900 per month) to elderly poor people and to poor people with disabilities. And Medicaid eligibility almost always goes along with an SSI check. And another one of the jurisdictional problems is that SSI is managed by the Social Security Administration. And that leads people to think that their Medicaid coverage comes from the SSA. But again, it doesn’t. Once the SSA gets you on SSI, then a state social service agency (i.e., welfare office) takes over your Medicaid coverage.
So that’s a very brief overview of these often-confused programs.
