Medicare and Medicaid are two separate government health programs with different rules, who they serve, and how they work

Medicare is a federal health insurance program for people 65 and older, regardless of income. It is also available to some younger people with disabilities or end-stage renal disease. You pay into Medicare through payroll taxes during your working years, and it becomes your insurance when you turn 65.

Medicaid (sometimes called "Medical" on state websites) is a joint federal and state program that covers low-income individuals and families of any age. Each state runs its own Medicaid program with its own income limits and covered services. You do not pay into Medicaid through taxes; instead, you show that your income is below your state's threshold.

The confusion is understandable—the names are similar, they both help pay medical bills, and in some cases a person can have both at the same time. But they are funded differently, cover different groups of people, and have different out-of-pocket costs.

Key Takeaways

  • Medicare is for people 65 and older (or some younger people with disabilities), while Medicaid is for people with low incomes of any age.
  • Medicare is funded by payroll taxes you paid during your working life; Medicaid is funded by federal and state tax dollars and has no cost to join.
  • Medicare has the same rules nationwide, but Medicaid rules vary significantly from state to state, including what services are covered and income limits.
  • You can have both Medicare and Medicaid at the same time, and when you do, Medicaid often pays costs that Medicare does not cover.

Who Each Program Covers

Medicare covers nearly all Americans age 65 and older. You become may be able to access automatically when you turn 65 if you have worked at least 10 years in a job where you paid Medicare taxes. If you did not work that long, you can still join by paying a monthly premium.

Medicare also covers people under 65 who have been on Social Security Disability Insurance (SSDI) for 24 months, people with end-stage renal disease (permanent kidney failure), and people with amyotrophic lateral sclerosis (ALS). These younger groups must meet specific medical or work-history requirements.

Medicaid covers low-income individuals and families. The income threshold varies by state and by family size. In some states, a single adult earning $1,500 per month might may have access to; in others, the limit is higher or lower. Medicaid also covers pregnant people, children, parents, elderly people, and people with disabilities—but only if their income falls below their state's limit.

How They Are Funded and What You Pay

Medicare is funded through payroll taxes. When you worked, you and your employer each paid 1.45% of your wages into the Medicare trust fund. When you turn 65, you become may be able to access to draw from that fund. Most people pay a monthly premium for Medicare Part B (doctor visits) and Part D (prescription drugs), though the amount depends on your income and when you signed up.

Medicaid is funded by federal and state tax dollars. There is no monthly premium to join Medicaid—it is free. However, some states charge small copays when you visit a doctor or fill a prescription, though these are usually just a few dollars. Pregnant people, children under 21, and emergency services are often exempt from copays.

If you have both Medicare and Medicaid (called "dual may be able to access"), Medicare pays first, and Medicaid covers some of the costs Medicare does not pay, such as copays and deductibles.

Coverage and Services: What Each Program Pays For

Medicare Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Medicare Part B covers doctor visits, outpatient care, and some preventive services. Medicare Part D covers prescription drugs. Medicare does not cover dental, vision, hearing aids, or long-term custodial care (help with bathing, dressing, and other daily tasks).

Medicaid covers doctor visits, hospital stays, prescription drugs, and many preventive services. Medicaid also covers services Medicare does not: dental care, vision care, hearing aids, and long-term care in nursing homes or at home. However, what Medicaid covers varies by state. For example, some states cover dental for adults; others do not. Some states cover hearing aids; others do not.

If you have both programs, you will typically use Medicare first for services both programs cover, and Medicaid will fill in gaps. This can mean lower out-of-pocket costs for you.

Rules and may be able to access Vary by State for Medicaid Only

Medicare rules are the same everywhere in the United States. If you are 65 and may be able to access, you get the same coverage in California as you do in Maine.

Medicaid rules change from state to state. Income limits, covered services, copay amounts, and even the name of the program differ. In some states, Medicaid is called "Medical" (California, Washington) or "Medi-Cal" (California). In others, it is "BadgerCare" (Wisconsin) or "Healthy Indiana Plan" (Indiana). A person who qualifies for Medicaid in one state might not may have access to in another state with stricter income limits.

If you move to a different state, your Medicaid coverage may change. You will need to reapply in your new state and may face a gap in coverage while the process is processed. Medicare, by contrast, moves with you automatically.

When You Might Have Both Programs

You can have Medicare and Medicaid at the same time. This happens when you are 65 or older (or may have access to for Medicare for another reason) and your income is low enough to also may have access to for Medicaid in your state.

People who are "dual may be able to access" often have lower out-of-pocket costs because Medicaid covers many of Medicare's copays, coinsurance, and deductibles. Medicaid may also cover services Medicare does not, such as dental or hearing aids. If you think you might may have access to for both, contact your state Medicaid office to learn about your state's income limits and process process.

How to Find Out Which Program You Need

If you are 65 or older, you are likely may be able to access for Medicare. You do not need to do anything if you are already receiving Social Security—Medicare will be enrolled automatically three months before your 65th birthday. If you are not on Social Security, you will need to contact Social Security to sign up for Medicare.

If you are under 65 and have a low income, contact your state Medicaid office to learn about income limits and how the process works. You can find your state's Medicaid office by visiting Medicaid.gov or calling 211 (a free helpline that connects you to local health and human services).

If you are 65 or older and have a low income, you may may have access to for both. Some states have programs that help people with Medicare costs if they cannot afford premiums and copays. Ask your state Medicaid office about "Medicare Savings Programs" or "Extra Help" with prescription drug costs.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older and your income is low enough, you can have both. Medicaid will help pay costs that Medicare does not cover, such as copays and deductibles. Contact your state Medicaid office to learn if you may have access to.

Do I pay a monthly premium for Medicaid?

No. Medicaid is free to join. Some states charge small copays (usually $1 to $5) when you visit a doctor or fill a prescription, but there is no monthly premium. Pregnant people and children are often exempt from copays.

What happens to my Medicaid if I move to another state?

Your Medicaid coverage ends when you move. You will need to explore for Medicaid in your new state, which has its own income limits and covered services. There may be a gap in coverage while your process is processed, so explore as soon as you move.

Does Medicare cover dental and vision care?

Original Medicare does not cover routine dental, vision, or hearing care. You can buy a separate dental or vision plan, or you can enroll in a Medicare Advantage plan that may include these services. Medicaid covers dental and vision in some states but not others.

How do I sign up for Medicare when I turn 65?

If you receive Social Security, you will be enrolled automatically three months before your 65th birthday. If you do not receive Social Security, contact Social Security at 1-800-772-1213 or visit ssa.gov to sign up. You can also enroll through Medicare.gov.