The Basic Difference

Medicare is a federal insurance program you pay into through payroll taxes 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, and it has no age requirement — seniors can use it at any age if they meet income limits.

The clearest way to think about it: Medicare is based on age and work history. Medicaid is based on income and assets. You can have both at the same time, and many seniors do. Some people have Medicare as their primary insurance and Medicaid as a supplement to cover costs Medicare does not pay.

The programs are run by different agencies, have different rules in each state (Medicaid especially), and cover different services. Understanding which one applies to you matters because it changes what you pay out of pocket and which doctors and hospitals you can use.

Key Takeaways

  • Medicare is for people 65 and older, regardless of income, and is the same in every state.
  • Medicaid is for people with low income and assets, and the income limits and covered services vary by state.
  • Many seniors have both Medicare and Medicaid at the same time, with Medicaid helping pay Medicare premiums and cost-sharing.
  • If you are unsure which program you may have access to for, your state Medicaid office or a local Area Agency on Aging can tell you based on your income and assets.
  • Enrollment important date and rules differ between the two programs, so missing a important date for one does not affect the other.

Who Qualifies for Medicare

You may have access to for Medicare when you turn 65, as long as you or your spouse worked and paid Medicare taxes for at least 10 years (40 quarters). You do not have to be retired — you can still be working. You do not have to be a U.S. citizen, but you must be a permanent resident who has lived in the United States for at least five years.

If you do not have 10 years of work history, you may still be able to buy Medicare Part A (hospital insurance) by paying a monthly premium. Your income does not matter for Medicare — a millionaire and someone living in poverty both pay the same premiums if they are the same age.

You must sign up during your enrollment window. If you turn 65 and do not sign up when you are supposed to, you may pay a penalty for the rest of your life. The initial enrollment period is the three months before the month you turn 65, the month you turn 65, and the three months after.

Who Qualifies for Medicaid

Medicaid is for people with low income and limited assets. The income and asset limits vary by state — what qualifies you in one state may not in another. Some states expanded Medicaid to cover more people; others did not. You can check your state's limits by calling your state Medicaid office or using the Medicaid.gov website to find your state's phone number.

For seniors, Medicaid also covers long-term care services like nursing home care and in-home help, which Medicare does not. This is one reason many seniors look into Medicaid even if their income is modest — they want coverage for care that Medicare will not pay for.

Unlike Medicare, there is no automatic enrollment for Medicaid. You have to contact your state Medicaid office and provide proof of income and assets. The process varies by state, but most states now let you start the process online or by phone.

What Each Program Covers

Medicare Part A covers hospital stays, skilled nursing facility care (up to 100 days per stay), hospice, and some home health care. Medicare Part B covers doctor visits, outpatient care, lab tests, and medical equipment. Medicare Part D covers prescription drugs. You pay premiums, deductibles, and copays for all of these.

Medicaid covers doctor visits, hospital stays, prescription drugs, and long-term care services. It also covers some services Medicare does not, such as dental care, vision care, and hearing aids — though what is covered varies by state. Medicaid typically has lower out-of-pocket costs than Medicare, and some people pay nothing.

If you have both Medicare and Medicaid, Medicare pays first for services both programs cover, and Medicaid pays the costs Medicare does not cover. This is called "dual coverage" and can mean very low out-of-pocket costs.

How Income and Assets Affect Your Coverage

Medicare does not look at income or assets. You pay the same premium whether you earn $20,000 a year or $200,000 a year. However, if your income is higher, you may pay higher premiums for Medicare Part B and Part D — this is called an Income-Related Monthly Adjustment Amount (IRMAA).

Medicaid looks closely at both income and assets. Income limits are usually between 100% and 200% of the federal poverty level, depending on your state. Assets matter too — most states allow you to have only a small amount in savings (often $2,000 to $3,000) and still may have access to for Medicaid. Your home and one car usually do not count toward the asset limit.

If you are thinking about explore for Medicaid and you have savings, talk to a Medicaid caseworker before you move money around. Some moves can disqualify you for a period of time, and the rules are complicated.

When You Might Have Both Programs

Many seniors have Medicare and Medicaid at the same time. This happens when you are 65 or older, you have Medicare, and your income is low enough to also may have access to for Medicaid in your state. People in this situation are sometimes called "dual may be able to access."

Having both programs is usually a good thing. Medicaid can pay your Medicare premiums, deductibles, and copays, which lowers your out-of-pocket costs. Medicaid also covers services Medicare does not, like long-term care and dental work. If you think you might may have access to for both, contact your state Medicaid office to ask about your income and assets.

Some states have special programs for people who are dual may be able to access, such as managed long-term care plans that coordinate both Medicare and Medicaid benefits. Your state Medicaid office can tell you what programs are available where you live.

How to Find Out Which Program You may have access to For

The fastest way is to call your state Medicaid office directly. They can tell you in one call whether you meet the income and asset limits for your state. You can find your state Medicaid office phone number on Medicaid.gov or by calling 1-800-MEDICARE (1-800-633-4227) and asking for a referral.

You can also contact your local Area Agency on Aging. These agencies help seniors understand their options and can often tell you whether you might may have access to for Medicaid based on your income. To find your local Area Agency on Aging, call the Eldercare Locator at 1-800-677-1116 or visit Eldercare.acl.gov.

If you are already on Medicare and think you might may have access to for Medicaid, do not wait. Medicaid can cover costs going back to the month you applied, so explore sooner rather than later can save you money on past medical bills.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older with Medicare and your income is low enough, you can have both. Medicaid will help pay your Medicare costs and cover services Medicare does not, like long-term care. Contact your state Medicaid office to see if you may have access to.

What if I miss the Medicare enrollment important date?

You can still sign up, but you may pay a penalty on your premiums for as long as you have Medicare. The penalty is 10% of the Part B premium for each year you were may be able to access but did not sign up. If you have a good reason for missing the important date (like still being covered by an employer plan), you may be able to avoid the penalty — ask Medicare.

Does Medicaid cover nursing home care?

Yes, Medicaid covers long-term nursing home care, which Medicare does not. However, you must meet your state's income and asset limits, and you may have to spend down your savings first. The rules vary by state, so contact your state Medicaid office to understand what you would need to do.

How do I know if my state expanded Medicaid?

You can check on Medicaid.gov or call your state Medicaid office. States that expanded Medicaid cover more people with low income than states that did not. If your state did not expand, you may have fewer options, but you can still ask your state office what programs might help you.

What happens to my Medicaid if my income goes up?

If your income rises above your state's limit, you may lose Medicaid. However, some states have programs that let you keep Medicaid for a few months while you transition to other coverage. Tell your Medicaid caseworker right away if your income changes so you understand what happens next.