During recent discussions at the national level, some government officials and even journalists have confused Medicare and Medicaid. These programs have been in existence for almost 60 years. but there still seems to be a need for clarity about the differences between these similar sounding government-backed health care programs. Both provide very important services for seniors throughout the country, but they differ in costs, services and beneficiaries. (Medi-Cal is California’s Medicaid program.)
Some differences between Medicare and Medicaid are as follows:
- Medicare is an insurance program administered by the federal government.
- Medicare provides health care coverage for people 65 or older or people with disabilities regardless of the person’s age.
- Medicaid is an assistance program administered by the state in accordance with federal guidelines.
- Medicaid provides health coverage to those with incomes below a specific threshold, regardless of age.
- Medi-Cal is California’s Medicaid program and is public health insurance that provides needed health care services for California low-income families, pregnant women, seniors, and disabled persons.
- Medi-Cal is financed equally by the state and federal government.
Since this website focuses on “aging,” I believe most of us know about and understand the federal Medicare program, so this post will focus on what the Medicaid/Medi-Cal programs do for seniors nationally and in California.
In public discussions, Medicaid is often characterized as a program for the poor or people who will not work. Unfortunately, that designation omits the fact that Medicaid provides health and long-term care for nearly 80 million people, including 13 million seniors and people with disabilities. The implication in public debates is that the program can be easily eliminated or cut if only those receiving Medicaid would “get to work.” In fact, over 2/3 of Medicaid beneficiaries under 65 are already working part or full time.
Justice in Aging recently published a Fact Sheet on Medi-Cal and its benefits. In California over 2.3 million older adults and people with disabilities rely on Medi-Cal. California receives $112 billion in federal funding to administer their Medi-Cal program. Many older Californians who need help with daily activities would not be able to afford home-based or skilled nursing home care without Medi-Cal. Medi-Cal helps older Californians pay for their Medicare cost sharing and also covers dental, vision, hearing and non-emergency medical transportation not covered by Medicare.
Over 900,000 older adults and people with disabilities receive coverage for essential long-term services and support through Medi-Cal, including in home care and care in institutional settings. Justice in Aging reports that at $83,000 a year for out of pocket at-home care and $147,000 annually for nursing home stays, long term care is completely unaffordable for many without Medi-Cal.
Home and Community-Based Services (HCBS) allow states that participate in Medicaid to develop creative alternatives for individuals who would otherwise require care in a skilled nursing facility or hospital. The states reach agreements with the federal government which allow for waiver services to be offered in either a home or community setting. The services offered under the waiver must cost no more than the alternative institutional level of care. Some of the services available under HCBS Waivers are case management, private duty nursing, family training, home health aides, and respite care. All recipients of HCBS Waivers must have full-scope Medicaid/MediCal eligibility.
In my state of California, the Assisted Living Waiver (ALW) program is a Home and Community-Based Services (HCBS) waiver created by legislation. It provides assisted living services for California State residents who are elderly or disabled and require a nursing home level of care but prefer to reside in an assisted living environment instead of a nursing home. Many states’ waiver programs offer a participant-directed option, which allows program beneficiaries to select their own caregivers, including friends and relatives. California’s ALW program does not. ALW services are provided by licensed home health agency providers or staff employed by the residential care facility.
Somewhat surprisingly to those who believe California is a State with rich benefits, California’s ALW waiver is not available statewide and is only available in the following counties: Alameda, Contra Costa, Fresno, Kern, Los Angeles, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, San Mateo, Santa Clara, and Somona. People who don’t live in a county participating in the ALW program can move to a county that offers the program, but that is not always a viable option. I live in Ventura County, which does not have this program, and I know several people who have had to move to care facilities in Los Angeles County to receive these services.
The Assisted Living Waiver is not an entitlement program. There are a limited number of participant enrollment slots, and when these slots are full, a waitlist for program participation forms. As of November 2024, there are 6287 people on the waiting list.
Beth Pinsker in an excellent February 27, 2025, article in Morningstar said the doom scenarios for Medicaid are bleak even without direct cuts to consumers. She reports that nursing homes are not profitable businesses now and if you lower the reimbursement rate they receive from Medicaid, they cannot hire new people, they can’t bring in new residents who need care, and then they start shutting down.
Medicaid is the last safety net for long-term care. Most of the public do not know that Medicaid pays for 2/3 of all those in nursing homes in the U.S.A. Individuals who qualify for the program are already out of options and usually have no assets and no other income but Social Security, which they turn over to Medicaid except for a small personal-needs allowance of less than $100 a month.
I think very few of us realize how critical Medicaid is to our seniors and disabled people in our country. The cost of long-term care has risen to unaffordable rates for many seniors and their families. Ms. Pinsker’s Morningstar article presents a very realistic and comprehensive picture of this very challenging situation, and there are many other studies outlining the problems and possible solutions to protect our rapidly growing senior population. Each of us needs to become familiar with the options and costs of long-term care, understand the programs and systems that can make the difference in the quality of this care for ourselves and our loved ones, and get involved in whatever way we can to ensure our future care needs will be met.
https://justiceinaging.org>federal-cuts-to-medicaid-will-harm-older-californians-on-medi-cal
https://health.usnews.com>what’s-the-difference-between-medicare-vs-medicaid
https://www.dhcs.ca.gov>sevices>Pages>HCBSWaiver.aspx
https://www.morningstar.com How would Medicaid cuts impact seniors in nursing homes?