The Basic Difference Between Medicare and Medicaid

Medicare is a federal health insurance program for people 65 and older, regardless of income. You pay into it through payroll taxes during your working years, and it becomes available when you turn 65. Medicaid is a joint federal and state program that covers people with low income — it has no age requirement, though many seniors use it alongside Medicare.

The confusion is understandable: both are government health programs with similar names, both help pay medical bills, and both are run partly by the federal government. But they are separate programs with different rules, different funding sources, and different coverage. A person can be on both at the same time — this is called being "dual may be able to access."

Key Takeaways

  • Medicare is based on age (65+) or disability; Medicaid is based on income and varies by state.
  • Medicare is federally funded through payroll taxes; Medicaid is jointly funded by federal and state money.
  • Medicare covers hospital care, doctor visits, and prescription drugs; Medicaid covers those plus long-term care and dental in many states.
  • You can be on both programs at the same time if you meet the income requirements for Medicaid in your state.
  • Each program has different out-of-pocket costs, deductibles, and coverage limits.

Who Medicare Covers

You are covered by Medicare if you are 65 or older and a U.S. citizen or permanent resident who has lived in the country for at least five years. You do not have to be retired — age is what matters. If you are under 65, you may still may have access to if you receive Social Security Disability Insurance (SSDI) for at least 24 months, or if you have end-stage renal disease or ALS.

Medicare enrollment is automatic for most people. If you are already receiving Social Security benefits when you turn 65, Medicare Part A and Part B are enrolled for you. If you are not yet receiving Social Security, you need to sign up during your initial enrollment period, which begins three months before the month you turn 65 and ends three months after.

Who Medicaid Covers

Medicaid covers people with low income and limited assets. The income and asset limits vary significantly by state — what qualifies you in one state may not in another. Most states have expanded Medicaid to cover adults earning up to 138% of the federal poverty level, but some have not. A single person in 2024 might may have access to with an income around $1,500 per month in an expansion state, but the exact number depends on where you live.

Medicaid also covers children, pregnant people, people with disabilities, and seniors with low income. Unlike Medicare, there is no age requirement. You can be 30 or 80 and still may have access to if your income and assets are low enough. Each state runs its own Medicaid program within federal guidelines, so the rules, covered services, and process process differ by state.

What Medicare Covers

Medicare has four parts. Part A covers inpatient hospital stays, skilled nursing facility care (up to 100 days per benefit period), hospice, and some home health care. Part B covers doctor visits, outpatient services, preventive care, and medical equipment. Part D covers prescription drugs. Part C (Medicare Advantage) is an alternative to Parts A, B, and D offered by private insurers — it includes prescription drug coverage and often adds dental, vision, and hearing benefits.

Medicare does not cover long-term custodial care (help with bathing, dressing, eating), dental care, vision care, or hearing aids, except in limited cases through Part C plans. You pay a monthly premium for Part B and Part D, and you have deductibles and copayments for most services. The exact amounts change each year.

What Medicaid Covers

Medicaid covers doctor visits, hospital care, emergency services, and prescription drugs in all states. Beyond that, coverage varies. Most states cover dental care, vision care, and hearing aids through Medicaid — services Medicare does not. Many states also cover long-term care in nursing homes and assisted living facilities, which is a major difference from Medicare.

Medicaid is the largest payer of long-term care in the United States. If you need to move to a nursing home and cannot afford it, Medicaid may cover the cost if you meet the income and asset limits. Medicare covers only the first 100 days of skilled nursing care after a hospital stay, and only if you are recovering from an acute illness. After that, you pay out of pocket or Medicaid takes over if you may have access to.

Being on Both Programs at the Same Time

If you are 65 or older and have low income, you may may have access to for both Medicare and Medicaid. This is called being "dual may be able to access." Medicaid then becomes your secondary payer — it covers costs that Medicare does not, such as long-term care, dental, and vision. It also helps pay Medicare premiums, deductibles, and copayments.

To be dual may be able to access, you must meet both programs' requirements: you must be 65 or older (or disabled and on Medicare), and your income and assets must be low enough for Medicaid in your state. If you are dual may be able to access, you keep your Medicare coverage and add Medicaid on top. The two programs coordinate to cover more of your medical expenses than either would alone.

How to Know Which Program You Are On

Check your insurance card. A Medicare card shows your name, a Medicare number, and the parts you are enrolled in (A, B, C, or D). A Medicaid card shows your name, a Medicaid number, and your state. If you have both, you will have two separate cards.

You can also call 1-800-MEDICARE to confirm your Medicare coverage, or contact your state Medicaid office to confirm Medicaid coverage. Your state Medicaid office number is on your Medicaid card or available through your state's health department website. If you are unsure which state program to contact, call 211 — it is a free referral service that can direct you to your local Medicaid office.

Questions to Ask Your Doctor or Insurance Company

Before your next appointment, write down which program or programs cover you and bring that information with you. Ask your doctor's office which insurance they accept — some accept Medicare but not Medicaid, or vice versa. Ask about out-of-pocket costs for the services you need most often.

If you are considering switching from one plan to another, ask your current insurance company about your coverage for any medications or specialists you see regularly. Ask whether there are any waiting periods or coverage gaps if you change plans. If you are unsure whether you may have access to for Medicaid, contact your state Medicaid office — they can tell you the income and asset limits for your situation and how the process works.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older and have low income, you may may have access to for both. Medicaid then helps pay for services Medicare does not cover and helps with Medicare's out-of-pocket costs. You will have two separate insurance cards and two separate programs working together.

Which program pays first if I have both?

Medicare pays first as your primary insurance. Medicaid pays second, covering costs Medicare does not pay. This is called coordination of benefits. Your provider bills Medicare first, then sends the remaining bill to Medicaid.

Does Medicare cover long-term care in a nursing home?

Medicare covers only the first 100 days of skilled nursing care after a hospital stay, and only if you are recovering from an acute illness. After that, you pay out of pocket or Medicaid covers it if you may have access to. Long-term custodial care — help with daily activities — is not covered by Medicare.

What if I turn 65 and do not sign up for Medicare?

You can still sign up later, but you may face a permanent penalty on your premiums. If you have employer health insurance when you turn 65, you may be able to delay enrollment without penalty, but you need to check with your employer's benefits office. Contact Medicare at 1-800-MEDICARE to understand your specific situation.

How do I know if I may have access to for Medicaid?

Income and asset limits vary by state. Contact your state Medicaid office or call 211 to learn the limits for your situation. You can also visit your state health department website — most have an online tool that estimates whether you may may have access to based on your income.