The Core Difference: Who Pays and Who Gets Coverage

Medicare is a federal insurance program you pay into through payroll taxes during your working years. You become covered at 65 regardless of income. Medicaid is a joint federal and state program that covers people with low income, regardless of age. The two programs have different rules, different costs, and different coverage — and you may may have access to for both.

Think of Medicare as something you've earned through work history. Think of Medicaid as a safety net based on current financial need. A person can be on Medicare alone, Medicaid alone, or both at the same time (called "dual may be able to access").

Key Takeaways

  • Medicare covers people 65 and older or those with certain disabilities, paid for through payroll taxes; Medicaid covers people with low income at any age, funded by federal and state money.
  • Medicare has four parts (A, B, C, D) with different coverage areas and costs; Medicaid benefits vary by state and may cover services Medicare does not, like long-term care.
  • Medicare requires you to pay premiums, deductibles, and copays; Medicaid typically has no or very low cost-sharing, depending on your state and income.
  • You can be on both programs at the same time if you are 65 or older with low income, which can reduce your out-of-pocket costs significantly.
  • Each state runs its own Medicaid program with different income limits and covered services, so what you get depends on where you live.

How You may have access to for Each Program

You may have access to for Medicare at 65 if you are a U.S. citizen or permanent resident and have worked at least 10 years in jobs where you paid Medicare taxes. You can also may have access to before 65 if you have been on Social Security Disability Insurance (SSDI) for 24 months, have end-stage renal disease, or have ALS (amyotrophic lateral sclerosis). Your age or disability status is what matters — not your income.

Medicaid looks at your income and assets. The income limit varies by state and changes each year. In 2024, most states cover adults earning up to about 138% of the federal poverty level, though some states have set their own limits higher or lower. You must also be a U.S. citizen or may have access to immigrant. Unlike Medicare, Medicaid can look at how much money you have in savings or investments.

If you are 65 or older and have low income, you may may have access to for both. Your state Medicaid program can tell you the exact income cutoff for your area.

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 medical equipment. Part D covers prescription drugs. Part C (Medicare Advantage) is an alternative to Parts A and B offered by private insurers — it includes drug coverage and often dental or vision benefits.

Medicare does not cover long-term custodial care (help with bathing, dressing, meals at home or in a facility), dental care, vision care, or hearing aids, unless you choose a Medicare Advantage plan that includes them.

Medicaid covers all the services Medicare covers, plus many it does not: long-term care in a nursing home, personal care information at home, dental care, vision care, and hearing aids. Medicaid also covers transportation to medical appointments in most states. However, what Medicaid covers varies significantly by state. Some states cover more mental health services, substance use treatment, or rehabilitation services than others.

How Much You Pay Out of Pocket

Medicare requires you to pay a monthly premium for Part B (about $165 in 2024, though it varies by income). Part A is free if you have 40 quarters of work history. Part D has a monthly premium that varies by plan. You also pay a deductible before coverage kicks in — for Part A hospital care, that was $1,632 in 2024. After the deductible, you pay copays or coinsurance for each service.

Medicaid typically has no monthly premium or a very small one based on your income. Most states charge little to nothing for office visits, hospital care, or prescriptions. Some states charge a small copay (usually $1 to $5 per visit or prescription). If your income is very low, you may pay nothing at all.

If you are on both Medicare and Medicaid, Medicaid usually pays your Medicare premiums and cost-sharing, which can save you hundreds of dollars per month. This is one major reason to check whether you may have access to for both.

How Coverage Works When You Have Both

If you are "dual may be able to access" — on both Medicare and Medicaid — Medicare is your primary payer. This means Medicare pays first for services it covers. Medicaid then pays your Medicare cost-sharing (premiums, deductibles, copays) and covers services Medicare does not, like long-term care.

You will have a Medicare card and a Medicaid card. When you see a doctor or go to the hospital, you show both. The provider bills Medicare first, then sends the remaining balance to Medicaid. You should not receive a bill if both programs cover the service.

Some states have special programs for dual-may be able to access people that coordinate care and may offer additional benefits like vision or dental. Ask your state Medicaid office whether your state has one.

How to Find Out Which Program Covers You

To check Medicare coverage, visit Medicare.gov or call 1-800-MEDICARE. You can create an account on Medicare.gov to see your coverage details, claims history, and prescription drug coverage.

To check Medicaid, contact your state Medicaid office directly — the phone number and website vary by state. You can also call 211 (a free helpline) and ask for your state Medicaid office. Have your Social Security number, income information, and asset information ready. Some states let you check online whether you might may have access to before you formally explore.

If you turn 65 soon, you can contact Medicare to learn about enrollment. If you think you have low income, contact your state Medicaid office to ask about income limits in your area.

What Happens If You Have a Gap in Coverage

If you reach 65 but do not sign up for Medicare Part B when you first become may be able to access, you may face a permanent penalty on your premiums. The penalty is 10% of the Part B premium for each 12-month period you were not covered. This penalty stays with you for life, so enrolling late is costly.

If you lose Medicaid coverage — for example, because your income increased — you may be able to switch to Medicare Part B if you are 65 or older. If you are under 65 and lose Medicaid, you may be able to buy coverage through the health insurance marketplace at Healthcare.gov, though you will pay premiums and cost-sharing.

If you are on both programs and lose Medicaid, you will still have Medicare, but you will have to pay Medicare's full cost-sharing again. Contact your state Medicaid office when ready if your coverage ends unexpectedly.

Frequently Asked Questions

Can I be on 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 will pay your Medicare premiums and cost-sharing, which can save you significant money. Contact your state Medicaid office to see whether your income qualifies.

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

Yes, Medicaid covers long-term nursing home care if you meet your state's income and asset limits. Medicare does not cover custodial long-term care. This is one major difference between the two programs. Rules vary by state, so contact your state Medicaid office for details.

What if I turn 65 but do not want Medicare?

You can delay Medicare Part B if you are still working and have health coverage through your employer. However, you must enroll in Part A (hospital insurance) at 65 to avoid penalties later. If you are on Medicaid, contact your state office before turning 65 to understand how Medicare enrollment will affect your coverage.

How do I know if my state's Medicaid covers a specific service?

Each state publishes its own Medicaid benefits guide. Call your state Medicaid office or visit its website to request a copy, or ask about a specific service. You can also call 211 and ask them to help you understand your state's coverage.

What if I disagree with a decision Medicare or Medicaid made about my coverage?

Both programs have appeal processes. For Medicare, you can request a reconsideration through Medicare.gov or by calling 1-800-MEDICARE. For Medicaid, contact your state office to ask about the appeal process — it varies by state. You have the right to appeal within a certain time frame, usually 60 days.