The Differences Between Insurance and Social Assistance Programs
by Jeannine Mancini
Health insurance is designed to protect you from the financial expenses incurred if you suffer an injury or illness. Insurance plans may be offered through an employer or purchased privately. If a person cannot afford health insurance, they may qualify for coverage through a social assistance program. One such program is Medicaid, the federal health care plan for low-income individuals and families. Although insurance and social assistance offer similar health care benefits, there are some key differences.
Social Assistance
Social assistance includes Supplemental Nutrition Assistance Program, Medicaid and Temporary Cash Assistance. Although the programs fall under the category of social assistance, each program has its own eligibility guidelines and requirements. A person may qualify for one program and not the others. Every state establishes and administers its own Medicaid program and is responsible for determining the type, amount, duration and services covered within federal guidelines. In some states, even the name is different. For example, the California Medicaid program is known as Medi-Cal.
Income and Asset Limits
Private or employer-sponsored health insurance plans are open to anyone, regardless of income or assets. Medicaid has strict income and resource limits for certain eligibility groups. The Medicaid program is open to low-income children, parents or caretakers of children, pregnant women, the elderly and disabled. As of 2013, there are no federal requirements for states to provide coverage to adults without dependent children. Income is calculated in relation to a percentage of the Federal Poverty Level (FPL). For example, pregnant women are allowed a household income between 185 and 200 percent of the FPL, depending on the state.
Pre-Existing Conditions
At the time of publication, private insurance plans can choose to decline coverage or charge higher rates if you have a pre-existing medical condition. A pre-existing condition is one that you had before purchasing insurance. Serious conditions, such as cancer, asthma, heart-disease and insulin-dependent diabetes, may result in an automatic decline. The Affordable Care Act prohibits insurance companies from declining coverage to children age 19 and under with pre-existing conditions. However, adults may still be declined coverage. Beginning in 2014, private insurance plans will no longer have the right to refuse coverage to anyone based on pre-existing conditions. Medicaid is open to everyone who meets the eligibility criteria, regardless of their current health status.
Costs
Insurance companies charge a policy premium, co-pays and have deductibles you must meet. Although Medicaid charges certain eligibility groups out-of-pocket expenses, services cannot be withheld for failure to pay. Under federal law, children, terminally ill individuals and individuals residing in an institution cannot be charged for Medicaid in any state. Unlike private insurance co-pays which can cost $100 or more, Medicaid caps co-pays at $3.90 per visit in 2013. Medicaid also covers prescriptions. In some states, coverage also include vision and dental. To inquire about your state's Medicaid program or apply for coverage, contact your state's department of health and human services.
References
- Medicaid: Non-Disabled Adults
- Medicaid: Cost Sharing Out of Pocket Costs
- Health Insurance 101: Pre-existing Conditions
- New York State Department of Health: Medicaid in New York State - How Do I Know if I Qualify
- North Carolina Department of Health and Human Services: Who is Eligible - Infants, Children, & Families
Photo Credits
- Jupiterimages/Photos.com/Getty Images
