The Core Difference: Who Pays and Who Qualifies

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, regardless of age. The biggest difference: Medicare is based on what you earned and paid; Medicaid is based on what you earn now.

This distinction matters because it shapes everything else — what you pay, what doctors accept you, what services are covered, and how long coverage lasts. A person can have both programs at the same time. Many seniors with low income do.

Key Takeaways

  • Medicare is a federal program for people 65 and older, paid for through taxes you paid while working; Medicaid is a state-run program for people with low income at any age.
  • Medicare has the same rules in every state; Medicaid rules, coverage, and income limits vary significantly by state.
  • Medicare requires you to pay premiums, deductibles, and copays; Medicaid typically costs little or nothing out of pocket.
  • You can have both Medicare and Medicaid at the same time, and many low-income seniors do.
  • Medicaid covers some services Medicare does not, such as long-term care and dental care, but coverage depends on your state.

How You Pay: Premiums, Deductibles, and Out-of-Pocket Costs

Medicare charges you a monthly premium for Part B (doctor visits) and Part D (prescription drugs). You also pay a deductible before coverage kicks in, and you pay copays or coinsurance when you use services. In 2024, the Part B premium is $164.90 per month for most people, though it can be higher if you have higher income. The Part B deductible is $240 per year.

Medicaid costs vary by state. Some states charge nothing; others charge small copays for doctor visits or prescriptions. Most Medicaid programs do not charge a monthly premium. If you have both Medicare and Medicaid, Medicaid typically covers the costs Medicare does not — your premiums, deductibles, and copays.

Income and Asset Limits: Who Qualifies

Medicare has no income or asset limit. If you are 65 or older and a U.S. citizen or permanent resident, you may have access to. You do not have to be poor, and you do not have to prove your income.

Medicaid has strict income limits that vary by state. In 2024, most states cover adults with income up to 138% of the federal poverty level, though some states set the limit lower. A few states have not expanded Medicaid at all. Asset limits also vary — some states count your savings and property; others do not. You will need to check your state's rules, because a person who qualifies in one state may not in another.

What Services Are Covered

Medicare covers hospital stays (Part A), doctor visits and outpatient care (Part B), and prescription drugs (Part D). It does not cover dental care, vision care, hearing aids, or long-term nursing home care. If you need these services, you pay out of pocket unless you buy a supplemental insurance plan or have Medicaid.

Medicaid covers doctor visits, hospital stays, and prescription drugs like Medicare does. But Medicaid also covers dental care, vision care, and long-term care in nursing homes — services Medicare does not. However, what Medicaid covers varies by state. One state may cover dental care; another may not. If you have both programs, Medicaid fills in many of the gaps Medicare leaves.

How State Rules Affect Medicaid Coverage

Medicare is the same everywhere. Your coverage in Florida is identical to your coverage in Oregon. Medicaid is not. Each state designs its own program within federal guidelines, which means income limits, covered services, and the doctors who accept Medicaid all differ by state.

For example, some states cover hearing aids through Medicaid; most do not. Some states cover dental care for adults; others cover only emergency dental work. Some states expanded Medicaid to cover more people; others have not. If you move to a different state, your Medicaid coverage may change. Your Medicare coverage will not.

When You Have Both Programs

If you are 65 or older and have low income, you may may have access to for both Medicare and Medicaid. This is called being "dual may be able to access." Medicaid becomes your secondary payer, covering costs that Medicare does not. This means Medicaid pays your Medicare premiums, deductibles, and copays, and covers services Medicare does not offer.

Dual coverage is valuable because it reduces your out-of-pocket costs significantly. However, you must meet both programs' rules. You must be 65 or older for Medicare and meet your state's Medicaid income limit. If your income rises above the limit, you lose Medicaid but keep Medicare.

How to Enroll and What Documents You Need

You enroll in Medicare automatically at 65 if you are already receiving Social Security. If you are not, you must sign up yourself through Medicare.gov or by calling 1-800-MEDICARE. Enrollment happens during your initial enrollment period, which is three months before and three months after your 65th birthday. Missing this window can mean paying a penalty for the rest of your life.

Medicaid enrollment is different in every state. In most states, you explore through your state's Medicaid office or through Healthcare.gov. You will need proof of income (recent pay stubs or tax returns), proof of citizenship or legal residency, and proof of your Social Security number. Some states process applications online; others require you to explore in person or by mail. Contact your state Medicaid office to find out how the process works where you live.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older and meet your state's Medicaid income limit, you can have both. Medicaid will cover costs that Medicare does not, including your Medicare premiums and deductibles. This combination is called dual coverage and is common among low-income seniors.

What happens to my Medicaid if my income goes up?

You will lose Medicaid coverage if your income rises above your state's limit. Medicare will continue because it has no income limit. You should report income changes to your state Medicaid office right away so they can adjust your coverage accurately and you do not face unexpected bills.

Does Medicare cover dental care or hearing aids?

No. Medicare does not cover routine dental care, vision care, or hearing aids. If you have Medicaid as well, your state's Medicaid program may cover some of these services, but coverage varies by state. Otherwise, you pay out of pocket or buy a separate dental or vision plan.

Why do Medicaid rules change from state to state?

Medicaid is a partnership between the federal government and each state. The federal government sets minimum standards, but each state decides its own income limits, which services to cover, and how much to pay doctors. This is why a service covered in one state may not be covered in another.

What if I miss the Medicare enrollment important date?

You can still enroll after your initial enrollment period ends, but you will pay a permanent penalty on your premiums for each year you were late. The penalty is 10% of the Part B premium for each full 12-month period you were not enrolled. It is important to enroll on time to avoid this cost.