Final answer:
Medicaid is a joint federal and state program targeting low-income individuals with variable coverage by state, while Medicare is a federal entitlement program providing health coverage primarily to individuals over the age of sixty-five, regardless of income. Medicaid and Medicare were both established in 1965 but have different structures and funding sources.
Step-by-step explanation:
There are distinct differences between Medicaid and Medicare. Medicaid is a formula-based, joint federal and state health insurance program providing coverage to low-income individuals and families, including the elderly and disabled, with varying eligibility and benefit levels set by each state. In contrast, Medicare is a federally funded entitlement program, primarily for people over sixty-five years old, regardless of income. Medicare offers various forms of coverage, including major hospitalization (Part A), supplementary coverage (Part B), and a prescription drug benefit (Part D).
Medicaid, created in 1965, has federal and state funding, where states play a significant role in administration. States have the authority to set income thresholds and provide services, which can lead to variability in coverage nationwide. Medicaid expenditure was about $627 billion in 2020, with the federal government covering approximately $405 billion of that cost.
On the other hand, Medicare, also established in 1965 as part of the entitlement projects under Lyndon Johnson's Great Society reforms, is funded through payroll taxes and was designed to ensure seniors and certain disabled individuals have access to health care. Medicare's total cost to the federal government was around $796 billion in 2019.