Disability Benefits, Medicare, and Medicaid: Know the Difference

January 3, 2018

Although Medicare and Medicaid are well-known government programs, many people don’t know the difference between the two. Things get even more confusing when you throw Social Security disability benefits into the mix. What’s the difference between all three programs, and how does applying for one program affect your eligibility for another?

What Is Medicare?

Medicare is a federal health insurance program. In order to qualify for Medicare, you must either be at least 65 years old, or you must be disabled. You must also have a solid work history.

Why is your work history important? If you have a job, you may have noticed that certain taxes get taken out of your paycheck before you ever receive it. Some of those taxes go toward funding Social Security and Medicare. When you are unable to continue working, whether due to age or disability, you will have paid into the system of Medicare and can therefore withdraw benefits. You can sign up for Medicare online through Social Security.

What if you’re already receiving Social Security disability benefits? It depends on what type of benefits you’re receiving. If you receive disability insurance benefits (DIB), which is also based on your work history, then Social Security will automatically enroll you in Medicare two years after your date of entitlement.

Medicare Part C (Medicare Advantage) and Part D (Prescription Drug) are separate plans available for purchase. You will not be automatically enrolled in these programs if you receive DIB.

What Is Medicaid?

Medicaid is a jointly-run health insurance program. In order to qualify for Medicaid, you must meet certain income and resource limitations. You don’t need to have worked in order to qualify for Medicaid.

“Jointly-run” means that both the federal government and individual state governments run Medicaid. Each state has different rules on how to qualify for Medicaid and what services will be covered.

How do your Social Security disability benefits affect your eligibility for Medicaid? Again, it depends on what type of benefits you are receiving. If you receive supplemental security income (SSI), you may be automatically eligible for Medicaid. In many states, including Indiana, your application for SSI is essentially also your application for Medicaid.

What Are Social Security Disability Benefits?

Social Security disability benefits are the monthly payments you receive from the federal government if you qualify for one of their two disability benefit programs: DIB and SSI. Unlike Medicare and Medicaid, your disability benefits are not part of a health insurance plan. Instead, what you do with your monthly payment is up to you. Many recipients use the monthly payments to pay for food, shelter, or other bills.

Which Should I Apply For?

With so much overlap, it can be difficult to determine which program you should apply for. Here are a few basic guidelines to keep in mind:

• Disabled and unable to work: Social Security disability benefits
• Solid work history: Medicare or DIB
• Little to no income: Medicaid or SSI
• Disabled but haven’t worked much over the past 10 years: SSI
• Disabled, not working, solid work history: DIB
• Under 65 years old, not disabled: Medicaid

Help from an Indiana Social Security Disability Lawyer

If you’re interested in applying for Social Security disability benefits, speak with an experienced Indiana disability attorney. Applying for disability benefits is a long, complicated process. A disability attorney can make sure you file all of your paperwork correctly and on time and can represent you at a disability hearing.

Call Hensley Legal Group today or contact us online for a free consultation. Be sure to download our free book, Eight Mistakes to Avoid When Applying for Social Security Disability Benefits.