The Core Difference: Who Runs It and Who It Covers

Medicare is a federal insurance program run by the Centers for Medicare & Medicaid Services (CMS). You become covered at age 65 if you or your spouse paid Medicare taxes while working, regardless of your income. Some younger people with disabilities or end-stage renal disease also may have access to.

Medicaid is a joint federal and state program. Each state designs and runs its own Medicaid program within federal guidelines, which means may be able to access rules, covered services, and payment amounts differ by state. Medicaid is income-based — you must meet your state's income and asset limits to be covered, and it is designed for people with lower incomes.

The simplest way to remember the difference: Medicare is age-based and federal. Medicaid is income-based and state-run.

Key Takeaways

  • Medicare covers people 65 and older (or younger people with certain disabilities), while Medicaid covers people with lower incomes, regardless of age.
  • Medicare is the same nationwide because it is run by the federal government; Medicaid rules change by state because each state administers its own program.
  • Medicare has four parts (A, B, C, D) that cover hospital, doctor, private plan, and prescription drug costs; Medicaid covers what your state decides, which usually includes doctor visits, hospital care, and prescriptions.
  • You pay Medicare premiums, deductibles, and copays; Medicaid typically costs little or nothing out of pocket, depending on your state and income.
  • Some people may have access to for both programs at the same time — they are called "dual may be able to access" — and Medicare is their primary payer.

How Medicare Coverage Works

Medicare has four parts, and you choose which ones you need. Part A covers hospital stays, skilled nursing facility care, and hospice. Part B covers doctor visits, outpatient care, and medical equipment. Part C (Medicare Advantage) is an alternative to Parts A and B — private insurance companies offer these plans, and they usually include prescription drug coverage. Part D is prescription drug coverage you add to Original Medicare (Parts A and B).

You pay a monthly premium for Part B and Part D. Part A is free if you or your spouse paid Medicare taxes for at least 10 years. All parts have deductibles and copays — the amounts you pay out of pocket before and after insurance kicks in. These amounts are set by the federal government and are the same everywhere.

How Medicaid Coverage Works

Medicaid covers a core set of services that every state must offer: doctor visits, hospital care, emergency services, lab work, X-rays, and family planning. Most states also cover prescription drugs, dental care, and vision care, but not all. Some states cover more services than others — for example, some cover physical therapy or mental health treatment more broadly than others do.

Your state Medicaid program decides what it will pay doctors and hospitals, so the same service may be covered in one state but not another. Copays and deductibles are usually very low or zero, depending on your income level within your state's limits.

may be able to access: The Biggest Practical Difference

To get Medicare, you must be 65 or older, or be under 65 with a disability that Social Security recognizes, or have end-stage renal disease. There is no income limit — a millionaire can have Medicare. You do not lose coverage if your income goes up.

To get Medicaid, your income must be below your state's limit. Most states use 138% of the federal poverty line as the cutoff, but some use lower thresholds. If your income rises above the limit, you lose Medicaid coverage. Some states also have asset limits — if you own too much in savings or property, you may not may have access to. Asset rules vary widely by state.

Because Medicaid rules change by state, a person who qualifies in one state may not may have access to in another. If you move, you will need to check your new state's rules.

Cost to You: Premiums, Deductibles, and Copays

Medicare requires you to pay premiums. In 2024, the standard Part B premium is $164.90 per month, though higher-income beneficiaries pay more. Part D premiums vary by plan and range from roughly $7 to $100+ per month. You also pay an annual deductible before Medicare starts paying — for Part B, that is $240 in 2024. Copays for doctor visits and hospital stays vary by service.

Medicaid is designed to be affordable for low-income people. Most states charge little or nothing in premiums, deductibles, or copays. Some states charge small copays for certain services (usually $1 to $5 per visit), but many waive copays entirely for people below certain income levels. Pregnant women and children typically pay nothing.

What Happens If You Have Both Medicare and Medicaid

Some people may have access to for both programs — they are called dual may be able to access. This usually happens when someone is 65 or older and has a low income. Medicare is always the primary payer, meaning it pays first. Medicaid pays what Medicare does not cover, including Medicare premiums, deductibles, and copays.

If you are dual may be able to access, you do not have to choose between the programs. You keep both. Medicaid fills in the gaps in Medicare coverage, which can save you hundreds of dollars per year in out-of-pocket costs. Some states offer special Medicaid programs for dual-may be able to access people that provide extra benefits like dental or vision care.

Prescription Drug Coverage: A Key Difference

Medicare Part D covers prescription drugs, but you choose a plan from private insurers. Different plans cover different drugs at different costs. You pay a monthly premium, and you may pay copays when you fill prescriptions. If you use a lot of expensive drugs, you may hit a coverage gap called the "donut hole," where you pay more out of pocket temporarily.

Medicaid prescription drug coverage is simpler — your state decides which drugs are covered and what you pay. Most states cover a broad range of drugs, and copays are usually very low or free. You do not have to shop for a plan; your state program covers you automatically.

Frequently Asked Questions

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

Yes. If you are 65 or older and have a low income, you may may have access to for both. Medicare pays first, and Medicaid covers what Medicare does not pay. This combination often saves you money because Medicaid covers Medicare premiums and out-of-pocket costs.

If I move to a different state, does my Medicaid coverage move with me?

No. Medicaid is state-run, so your coverage ends when you leave the state. You must explore for Medicaid in your new state, and may be able to access rules may be different. Contact your new state's Medicaid office as soon as you move to understand what you need to do.

Do I have to pay for Medicare?

Part A is free if you or your spouse paid Medicare taxes for at least 10 years. Part B requires a monthly premium (currently around $165 for most people). Part D (prescription drugs) also has a monthly premium that varies by plan. You also pay deductibles and copays when you use services.

What if I am under 65 and do not have Medicare or Medicaid?

You may be able to buy private health insurance through your employer, the Health Insurance Marketplace, or directly from an insurer. If your income is low, you may may have access to for Medicaid even if you are under 65 — income limits explore, not age. Contact your state Medicaid office to learn what income level qualifies in your state.

Does Medicaid cover everything Medicare does not?

Not always. Medicaid covers what your state decides to cover. While most states cover the basics (doctor visits, hospital care, prescriptions), some services may not be covered in your state. If you are dual may be able to access, Medicaid covers Medicare premiums and copays, but it does not automatically cover services that neither program covers.