Medicare Overview
Medicare is the federal health insurance program for individuals aged 65 or older, as well as those under 65 who have been receiving SSDI benefits for 24 months, or are diagnosed with End-Stage Renal Disease (ESRD) or ALS (Lou Gehrig’s disease).
The Four Parts of Medicare
- Part A: Covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Most people do not pay a premium for Part A if they or their spouse paid Medicare taxes for at least 10 years (40 quarters of coverage; QCs).
- Part B: Covers certain doctors’ services, outpatient care, medical supplies, and preventive services. Part B requires a monthly premium ($202.90 for most in 2026).
- Part A and B collectively are known as Original Medicare.
- Part C: Known as Medicare Advantage. An alternative to Original Medicare. These are all-in-one plans offered by private insurance companies approved by Medicare. They often include Part D and extra benefits like dental, vision, and hearing.
- Part D: Known as PDP. Helps cover the cost of prescription drugs. These plans are run by private insurance companies following rules set by Medicare.
Other Medicare Insurance Programs
- Supplemental Insurance: Known as Medigap. Helps pay out-of-pocket costs associated with Original Medicare.
- Medicare Savings Program: A state-offered program that pays for Medicare out-of-pocket costs.
- Low Income Subsidy (LIS, Extra Help): A federal program that provides financial assistance for Medicare Part D prescription drug costs.
Medicare vs Medicaid Q&A
Q1. Both are government programs, so what is the difference?
A. The biggest difference is "who" the target audience is.
- Medicare: Based on age. It is a federal program for anyone age 65 or older, or those with certain disabilities, regardless of wealth. Think of it as a “right” earned by paying taxes while working.
- Medicaid: Based on income. It is a joint federal and state-funded program, run by individual states, designed to help those with limited income and assets, regardless of their age.
Q2. How do the medical costs differ?
A. Medicare pays "part" of the cost, while Medicaid pays "almost all" of it.
- Medicare: Outpatient and physician services (Part B) cover 80% of the Medicare-approved amount, leaving the remaining 20% and the annual deductible as out-of-pocket expenses. Inpatient hospital services (Part A) are subject to a separate cost-sharing structure, which includes a deductible and daily copayments based on the length of the hospital stay.
- Medicaid: Covers almost all remaining out-of-pocket costs that Medicare doesn’t pay. It also helps cover premiums and prescription drug costs.
Q3. Is the cost of a Nursing Home fully covered?
A. This is where the biggest difference lies.
- Medicare: Medicare covers up to 100 days of Skilled Nursing Care only when a physician deems it necessary following a formal inpatient hospital stay of at least three days. The cost-sharing structure is as follows: $0 for days 1–20; $217 per day for days 21–100 (as of 2026); and the full cost thereafter from day 101. Please note that Custodial Care, such as assistance with meals, bathing, and mobility, is not covered by Medicare.
- Medicaid: Supports long-term care. Medicaid covers nursing home costs or home health aide services (Home Care).
*Observation Status is not recognized as a formal inpatient admission, which may result in a denial of Skilled Nursing Facility (SNF) benefits. When admitted, be sure to confirm with the hospital whether your status is officially inpatient.
Q4. I have both. What does that mean?
A. You have "Dual Eligibility.”
- If you hold both Medicare and Medicaid cards, you are considered Dual Eligible.
- You can enroll in a Dual Special Needs Plan (D-SNP), which coordinates the benefits of both programs into one integrated plan for more efficient care. Specific name of the D-SNP plan may vary by state.
- When you receive medical services under a D-SNP, Medicare acts as the primary payer, covering its portion first. Medicaid then serves as the secondary payer to cover the remaining costs. For more details visit our D-SNP page.
Q5. What happens if I move to another state?
A. Original Medicare stays the same; Medicaid must be reapplied for.
- Medicare: Since it is a federal program, you can use your Medicare plan anywhere in the United States without issue (Original Medicare only).
- Medicaid: Policies vary by state. If you move from New Jersey to New York, you must close your New Jersey coverage and apply for New York Medicaid to undergo a new eligibility review.
