The basic difference: who pays and what they cover

Medicare is a federal health insurance program you earn by paying into it during your working years. You become may be able to access at 65, regardless of income. Medicaid is a joint federal and state program that covers people with low income, at any age — including children, working adults, and seniors.

The confusion happens because both programs help pay medical bills, both can cover people over 65, and both are government-run. But they work differently, cover different things, and have different rules depending on where you live.

Many people have both programs at the same time. When that happens, Medicare is the primary payer — it covers what it covers first, and Medicaid fills in some of the gaps. Understanding which program does what helps you know what costs you'll face and where to turn when you have questions.

Key Takeaways

  • Medicare is based on your work history and age; Medicaid is based on income and assets, and rules vary by state.
  • Medicare covers hospital stays, doctor visits, and some prescription drugs, but has copays and deductibles you must pay.
  • Medicaid covers more services than Medicare in many states, including nursing home care and personal care information, but only if your income and assets are low enough.
  • You can have both programs at once; when you do, Medicare pays first and Medicaid may cover costs Medicare does not.
  • Medicaid rules are different in every state, so what is covered and who qualifies depends on where you live.

How Medicare works: what it covers and what you pay

Medicare has four parts. Part A covers inpatient hospital care, skilled nursing facility stays (up to 100 days per benefit period), hospice, and some home health care. Part B covers doctor visits, outpatient care, lab tests, and some preventive services. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative way to get Parts A and B through a private insurance company.

You pay for Medicare through a combination of premiums (monthly payments), deductibles (the amount you pay before coverage starts), and copays or coinsurance (your share of each service). For example, Part A has a deductible of $1,676 per benefit period for hospital stays (this amount changes yearly). Part B has a monthly premium that varies based on your income, plus a yearly deductible and 20% coinsurance for most services.

Medicare does not cover dental care, vision care, hearing aids, or long-term nursing home care. It also does not cover custodial care — help with bathing, dressing, and other daily tasks — unless it is part of skilled nursing or home health care ordered by a doctor.

How Medicaid works: income limits and what varies by state

Medicaid is run by each state with federal money, so the rules are not the same everywhere. To be covered by Medicaid, your income and assets must be below your state's limit. Income limits vary widely — some states cover people earning up to 138% of the federal poverty level, while others use different thresholds. Your state's Medicaid office can tell you the exact limit where you live.

Medicaid covers many services Medicare does not: nursing home care, assisted living in some states, personal care information (help with bathing and dressing), dental care in some states, and vision care in some states. It also typically has lower copays than Medicare or none at all.

The catch is that Medicaid has strict asset limits — in most states, you cannot have more than $2,000 in countable assets (though the exact rules are complex and some assets, like your home, may not count). If you have savings or own property, you may not be covered until you spend down to the limit. Some people plan ahead with the help of an elder law attorney to protect assets while becoming Medicaid-may be able to access, but this is a specialized area and rules vary by state.

When you have both Medicare and Medicaid

If you are 65 or older and have low income and assets, you may be covered by both programs. People in this situation are sometimes called "dual may be able to access." When you have both, Medicare is the primary payer — it covers what it covers first, and Medicaid steps in to cover some of the costs Medicare leaves you responsible for.

For example, if you go to the hospital, Medicare Part A pays for the hospital stay (after you meet the deductible). Medicaid may then pay your Part A deductible and coinsurance. If you see a doctor, Medicare Part B pays 80% of the approved amount after the deductible. Medicaid may cover the 20% coinsurance and the Part B deductible.

Having both programs can significantly reduce your out-of-pocket costs, especially for services like nursing home care that Medicare does not cover but Medicaid does. However, you must be found may be able to access for both programs in your state, and the process can be complicated. Your state Medicaid office or a local aging agency can help you understand whether you may have access to.

How to find out which program covers you

To learn whether you are covered by Medicare, contact Medicare directly at 1-800-MEDICARE (1-800-633-4227) or visit Medicare.gov. You can also call your local Social Security office. Medicare may be able to access is the same nationwide — if you are 65 or older and have worked long enough to earn credits, you are may be able to access.

To learn whether you are covered by Medicaid, contact your state Medicaid office. The phone number and website are different in every state. You can find your state's office by visiting Medicaid.gov and selecting your state, or by calling 211 (a free helpline that connects you to local health and human services). When you call, have your income and asset information ready.

If you think you may be may be able to access for both programs, start by contacting your state Medicaid office. They can tell you the income and asset limits in your state and help you understand the next steps. Some states have programs specifically for people who are may be able to access for both Medicare and Medicaid, with extra support to help you use your benefits.

What to do if you cannot afford your Medicare costs

If you are on Medicare but cannot afford the premiums, deductibles, or copays, several programs may help. The Medicare Savings Program helps pay your Part B and Part D premiums and some out-of-pocket costs if your income is low. The Low-Income Subsidy Program helps pay Part D prescription drug costs. Both are run by your state, and income limits vary.

To find out whether you may have access to, contact your state Medicaid office or call 1-800-MEDICARE. You can also call 211 for a referral to a local program that helps people understand their Medicare options. Some aging agencies and nonprofits offer free counseling to help you compare plans and understand your costs.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older and have low income and assets, you may be covered by both. When you have both, Medicare pays first for services it covers, and Medicaid may cover costs Medicare does not pay. You must be found may be able to access for both programs in your state.

Does Medicare cover nursing home care?

Medicare covers skilled nursing facility care for up to 100 days per benefit period, but only if you were hospitalized first and the care is for a condition related to that hospital stay. It does not cover long-term custodial care in a nursing home. Medicaid covers long-term nursing home care if you meet income and asset limits.

What if I am 65 but do not have Medicare yet?

You must sign up for Medicare during your enrollment period, which begins three months before the month you turn 65. If you miss this window, you may pay a penalty for the rest of your life. Contact Social Security or Medicare to sign up, or visit Medicare.gov.

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

Medicaid rules are different in every state. Contact your state Medicaid office with your income and asset information, or call 211 for a referral. Your state office can tell you the exact limits and help you understand whether you may have access to.

What if my state did not expand Medicaid?

Some states have not expanded Medicaid to cover more low-income adults. In those states, you may not be may be able to access for Medicaid even if your income is low, unless you are 65 or older, disabled, or in another category your state covers. Contact your state Medicaid office to find out what categories are covered where you live.