Medicare and Medicaid

Definition

Medicare is a federal program that provides health coverage if you are 65 or older or have certain disability; Medicaid is a state and federal program that provides health coverage if you have very low income.

Analogy

Imagine Medicare and Medicaid as two types of lifeboats on a ship called "Healthcare". Medicare is available for all passengers who are aged (65 years old) or disabled regardless their income level while Medicaid only takes aboard those who can't afford other lifeboats due to their low income.

Related terms

Social Security Act: An act passed in 1935 creating several programs designed to provide aid to certain groups such as the unemployed, elderly and families with dependent children. It's like the ship that first launched these 'lifeboats'.

Affordable Care Act: Also known as "Obamacare", it expanded Medicaid eligibility, created health insurance exchanges, and prevents insurance companies from denying coverage due to pre-existing conditions.

Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO.