The Basic Difference: Who Pays and How

Medicare is a federal health insurance program you earn through your work history — you or your spouse paid into it through payroll taxes for at least 10 years. Medicaid is a joint federal and state program that covers people with low income, regardless of work history. Most seniors age 65 and older are covered by Medicare. Medicaid covers some seniors too, but usually only those whose income and savings fall below their state's limits.

The key difference: Medicare is based on age and work record. Medicaid is based on income and assets. You can have both at the same time — this is called "dual may be able to access" — and many low-income seniors do.

Key Takeaways

  • Medicare covers nearly all Americans at age 65, regardless of income, because you paid into it through work.
  • Medicaid covers people of any age with low income and limited savings, and may be able to access rules vary significantly by state.
  • You can be covered by both Medicare and Medicaid at the same time if your income is low enough.
  • Medicare Part A covers hospital care, Part B covers doctor visits, and Part D covers prescription drugs; Medicaid covers whatever your state decides to include.
  • If you did not work long enough to earn Medicare, you may still be covered by Medicaid if your income qualifies.

Who Medicare Covers

You become may be able to access for Medicare the month 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 did not work long enough yourself, you may still be covered through your spouse's work record, even if you are divorced (as long as the marriage lasted at least 10 years). If neither you nor a spouse qualifies, you can still buy Medicare at age 65, though the monthly premium will be higher.

Who Medicaid Covers

Medicaid has no age requirement — it covers children, working-age adults, and seniors. The main requirement is income. In most states, a single person's monthly income must be below 100 to 150 percent of the federal poverty line to be covered; a couple's income must be below roughly $1,500 to $2,000 per month combined, though this varies widely by state. You also cannot own more than a small amount in savings or assets — usually $2,000 for an individual or $3,000 for a couple, though again this differs by state.

Some states have expanded Medicaid to cover more people; others have not. A few states cover seniors with slightly higher incomes if they need long-term care. Because rules change and vary so much, the only way to know if you may have access to in your state is to contact your state Medicaid office or use the online screening tool at your state's health department website.

What Each Program Covers

Medicare has four parts. Part A covers hospital stays, skilled nursing facility care, hospice, and some home health care. Part B covers doctor visits, outpatient care, lab tests, and preventive services. Part D covers prescription drugs. Part C (Medicare Advantage) is an alternative way to get Parts A, B, and D through a private insurance company. Most seniors pay a monthly premium for Part B and Part D, and there are deductibles and copays.

Medicaid covers whatever your state decides to include. All states must cover hospital care, doctor visits, lab tests, X-rays, nursing facility care, and home health services. Many states also cover dental, vision, hearing aids, and mental health care. Some cover prescription drugs more generously than Medicare does. Because coverage varies by state, you need to check your state's Medicaid handbook or call your state Medicaid office to know exactly what is covered where you live.

Cost Differences Between the Two

Medicare Part B costs roughly $165 per month for most people in 2024, though higher earners pay more. Part D (prescription drug coverage) costs between $7 and $100+ per month depending on the plan. Part A is usually free if you or your spouse paid Medicare taxes long enough. You also pay deductibles (the amount you pay before insurance kicks in) and copays (a fixed amount per visit or service).

Medicaid is free or very low cost — most states charge nothing or only a few dollars per visit. There are usually no deductibles. However, Medicaid is only available if your income is low enough, so it is not a choice for most seniors with moderate or higher income.

If You Are Dual may be able to access (Both Medicare and Medicaid)

If your income is low enough to may have access to for Medicaid and you are also 65 or older (or disabled and on Medicare), you are dual may be able to access. Medicaid pays your Medicare premiums, deductibles, and copays, which can save you hundreds of dollars per month. Medicaid also covers services Medicare does not, like dental and vision care in many states.

To be dual may be able to access, you must first be enrolled in Medicare. Then you explore for Medicaid through your state Medicaid office. Your state will determine how much Medicaid covers based on your income and which "dual may be able to access" category you fall into. Some states have special programs just for dual may be able to access seniors — ask your state Medicaid office what programs exist where you live.

What Happens If You Do Not may have access to for Either

If you are under 65 and do not have a low enough income for Medicaid, you can buy private health insurance through the Health Insurance Marketplace (healthcare.gov) or directly from an insurance company. You may be able to get a subsidy (a discount on your premium) if your income falls in a certain range.

If you are 65 or older but did not work long enough to earn Medicare, you have two options: buy Medicare at age 65 (your premium will be 10 percent higher for each year you delayed), or if your income is low enough, explore for Medicaid. Some states also have programs for uninsured seniors — contact your state health department to ask what is available.

Frequently Asked Questions

Can I have both Medicare and Medicaid at the same time?

Yes. If you are 65 or older and your income is low enough to may have access to for Medicaid, you can have both. Medicaid will pay many of your Medicare costs. You must be enrolled in Medicare first, then explore for Medicaid through your state.

What if I worked but not long enough for Medicare?

If you worked at least 6 quarters (1.5 years) but fewer than 10, you may still be covered by Medicare at 65 — rules are different for people born in different years. Contact Social Security to check your record. If you do not may have access to, you can buy Medicare at 65, or explore for Medicaid if your income is low enough.

Does Medicaid cover prescription drugs better than Medicare?

It depends on your state and your specific drugs. Some states cover more drugs than Medicare Part D does, and Medicaid copays are usually lower. Ask your state Medicaid office or pharmacist to compare what each program covers for the drugs you take.

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

Income and asset limits vary by state. Contact your state Medicaid office directly, or use the online screening tool on your state health department website. You can also call 211 and ask for a Medicaid referral in your area.

What if my state did not expand Medicaid?

Some states have not expanded Medicaid to cover more working-age adults, but seniors are covered in all states if their income is low enough. The income limit may be lower in your state, but you can still explore. Contact your state Medicaid office to find out the exact limit where you live.