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What are the differences between a Medicaid and Medicare assistance program?

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Quick Answer

Medicare is a federally run entitlement program of medical assistance for the elderly, disabled and those with permanent kidney failure, whereas Medicaid is a state-run medical program for those in financial need, reports Nolo. The coverage that each program provides and the costs to participants differ. Federal taxes, payroll taxes and the premiums paid by participants fund Medicare, while both federal and state taxes fund Medicaid, explains About.com.

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Full Answer

Participants in Medicare are entitled to the benefits it provides because they pay for it with their taxes and premiums, according to Nolo. They also pay for ongoing services in the form of deductibles, copayments and other costs. Although participants have choices in the plans they enroll in, basic rules and coverage remain the same throughout the country. Eligibility for Medicaid is based on the financial need of participants, and specific rules and coverage vary from state to state. Medicaid programs in some states charge small fees for medical services.

Some states only provide Medicaid for children, pregnant women, the elderly, the disabled and the blind. Other states supply more funding and extend the program to include everyone with incomes under 138 percent of federal poverty level as of 2015, states About.com. On the other hand, all eligible individuals receive basic Medicare coverage regardless of their incomes.

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