Why Should Delaware Care?
Nearly half of all First State residents rely on health insurance coverage provided through either Medicaid or Medicare. It’s important for Delawareans to understand the differences between the programs, especially with cuts to both programs following the passage of the federal “One Big Beautiful Bill Act.”
Medicare and Medicaid provide crucial health insurance coverage for some of Delaware’s most vulnerable populations. But changes to eligibility fueling misconceptions about how the two programs work and who can qualify for coverage.
Knowing how the two programs differ and what has changed since the enactment of the “One Big Beautiful Bill Act” can help Delawareans live healthier lives by knowing whether they can be seen by a doctor or not. Recent updates to the programs mean people who used to be entitled to coverage now no longer qualify.
Medicare is a federally backed program offering health insurance coverage, typically for those over 65, like retirees, who have paid into the 1.45% tax that is levied on their income for Medicaid and social security benefits. Medicaid is a a state-run public assistance program that offers coverage options for lower-income adults and families.
New changes and restrictions, particularly for asylees, refugees and some green card holders, at the federal level will disrupt Delaware’s healthcare system, said John Whitelaw, an attorney with the Community Legal Aid Society who works with Medicare and Medicaid recipients.
“If I’m a refugee and I’ve been getting dialysis and I lose my coverage … it becomes a medical emergency,” he said. “I go to the emergency room and then I will only get emergency dialysis in the hospital, which is a terrible result for everybody.”
Medicare and Medicaid: Key differences
Let’s start with the basics.
Medicare is a federally run program funded mainly through payroll taxes. It provides health insurance for people over 65, or those receiving disability benefits from the Social Security Administration (SSA). All working taxpayers, including undocumented immigrants, pay for this benefit through their income taxes. The SSA determines eligibility.
Traditional Medicare allows people to choose how much coverage they need by selecting one or more of three parts: Medicare Part A offers free coverage of hospital visits, Medicare Part B covers doctor visits for a monthly premium and Medicare Part D covers prescriptions at an additional monthly cost.
There’s also a Medicare Part C, which is better known as Medicare Advantage. This is a private health plan individuals can opt into that includes all “parts.” And while it offers extra benefits such as vision, hearing and dental, there are heftier out-of-pocket costs for Medicare Advantage.
Long-term care, such as assisted living or relocating to a nursing home, is not covered by Medicare.
Medicaid, on the other hand, is a needs-based program jointly funded by the federal government and the state. Delaware’s Department of Health and Social Services (DHSS) is in charge of determining eligibility and administering the program.
Eligibility is income-based. Some programs may also have limits on how many assets, such as a home or a car, an individual owns. Some states only provide Medicaid to eligible children and their parents, pregnant women or people with disabilities. But Delaware is one of 40 states plus Washington, D.C., that has expanded Medicaid coverage under the Affordable Care Act or “Obamacare.”
In Delaware, adults under 65 with a household income at the federal poverty level — $1,330 a month for a single adult — are eligible for Medicaid coverage. According to Zillow, the average monthly rent in Delaware is about $2,000.
The state-run program allows qualified individuals to pick from a handful of “managed care organizations” that provide the actual health insurance coverage. Delaware’s “Diamond State Health Plan” relies on contracts with AmeriHealth Caritas Delaware, Delaware First Health and Highmark.
Certain healthcare providers, including primary care doctors, specialists such as obstetricians and gynecologists, hospitals and pharmacies, will accept these insurances at little-to-no charge or a copay of no more than $15 per month. The same goes for certain prescriptions. There also are other Medicaid programs that can cover long-term care, such as nursing homes or home health care.
Who is eligible?
Both programs have citizenship and residency requirements as well as age and income restrictions.
Undocumented immigrants have always been excluded from Medicaid and Medicare, even if they are working and paying taxes.
Currently, the “One Big Beautiful Bill Act” has deemed that only U.S. citizens, green card holders that have passed the five-year bar, green card holders not subject to that waiting period, and a few other narrow categories of non-U.S. citizens are eligible for coverage.
American-born citizens and others who can qualify for Medicare despite that bill’s narrowing view then face two eligibility paths: One for those over the age of 65 and another for those seeking coverage before their 65th birthday due to a disability.
The state Medicaid program, however, is meant for families and people of all ages, and eligibility is income- and asset-based. Many families with children that do not qualify for Medicaid can receive coverage through the Children’s Health Insurance Program, which allows for higher income limits than Medicaid.
DHSS, the Delaware agency in charge of determining Medicaid eligibility, provides a screening questionnaire that asks information about an applicant’s household finances to determine eligibility. Federal guidelines give states up to 45 days to review applications, but wait times can vary drastically, sometimes taking months due to staffing shortages and depending on the case.
Medicare recipients do not need to renew their coverage, unless they want to change their coverage.
As of now, Medicaid recipients must reapply annually. However, starting Jan. 1, 2027, people will have to apply every six months, thanks to new federal guidelines.
Changes ahead
This isn’t the first time Congress has changed eligibility requirements for these programs.
Thirty years ago, the parameters for lawful immigrants shifted, as well. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 enacted a five-year waiting period or “bar” for most lawful, permanent residents from other countries known as green card holders. Yet, it still gave refugees, asylum seekers and those under parole access to Medicaid and Medicare.
That will no longer be true as of Oct. 1. Recent refugees and asylum seekers who have not yet obtained their green cards will no longer qualify for the state-run Medicaid program. This includes people who are disabled, or have serious health conditions such as cancer or diabetes, who would have otherwise relied on such aid.
On the Medicare side, it’s the same story. Refugees, asylum seekers and those with temporary protected status who were on track to become Medicare beneficiaries will no longer be eligible as of Feb. 1, 2027.
Alternative options
Whitelaw, the Delaware-based Community Legal Aid Society attorney, said a reduction in health insurance coverage could lead to terrible outcomes for Delaware emergency rooms that are expected to see increased visits from patients that might be forced to delay care until it’s an emergency. Meanwhile, the patients themselves will also grapple with a large, looming bill on the back end.
The main alternative to Medicaid for individuals facing economic challenges is to pay for their own coverage through the Affordable Care Act marketplace. However, those insurance costs have skyrocketed in recent years. Earlier this month, the state announced premiums will increase by double-digit percentages again next year.
Other than that, options are “slender and slim,” Whitelaw said.
Another viable option, especially for uninsured patients, is relying on medical services provided by community health clinics such as Wilmington’s Westside Family Health Care and La Red Health Center in Georgetown. As federally qualified health centers, these organizations can offer services dependent on household size and income restrictions.
But even then, Whitelaw, who has been in the industry for decades, predicts these clinics will be forced to absorb more patients. Others may not even seek out preventative care anymore, he said.
“People are going to delay coverage until they are in crisis,” said Whitelaw, “and then they will show up at the emergency room.”
