Medicare and Medicaid are separate government programs, but their names are similar and their purposes overlap, which confuses most people

Medicare is a federal health insurance program for people 65 and older, regardless of income. It also covers some younger people with disabilities and people with end-stage renal disease. You pay into Medicare through payroll taxes during your working years, and then the program helps pay your medical bills after you turn 65.

Medicaid is a joint federal and state program that helps pay medical costs for people with low income. Each state runs its own Medicaid program within federal guidelines, so what Medicaid covers and who it serves varies by state. You do not pay into Medicaid through taxes — it is funded by general tax revenue.

The key difference: Medicare is based on age or disability status and how much you paid in taxes. Medicaid is based on income and assets. You can have both programs at the same time — this is called being "dual may be able to access" — and many people over 65 with low income do.

Key Takeaways

  • Medicare is a federal program for people 65 and older, paid for through payroll taxes you contributed during your working years.
  • Medicaid is a state-run program for people with low income, and what it covers depends on which state you live in.
  • You can be enrolled in both Medicare and Medicaid at the same time if you meet the income and age requirements for each.
  • Medicare has four parts (A, B, C, and D) that cover different services, while Medicaid coverage varies by state but typically includes doctor visits, hospital care, and prescription drugs.
  • Both programs have costs to you — Medicare has premiums, deductibles, and copayments, while Medicaid costs vary by state and income level.

How Medicare Works and What It Covers

Medicare has four parts, and understanding what each one does helps you know what costs you will and will not have to pay yourself. Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Part B covers doctor visits, outpatient services, medical equipment, and preventive care. Most people pay a monthly premium for Part B, and you also pay a deductible and copayment when you use services.

Part C, also called Medicare Advantage, is an alternative way to get Parts A and B coverage through a private insurance company approved by Medicare. These plans often include prescription drug coverage and may offer extra benefits like dental or vision, but they usually have networks of doctors you must use. Part D is prescription drug coverage, which you can add to Original Medicare (Parts A and B) or get through a Medicare Advantage plan.

When you turn 65, you have a window to sign up for Medicare without penalties. If you delay signing up for Part B or Part D without a valid reason, you will pay a higher premium for as long as you have Medicare. The sign-up period is seven months long, centered on your birthday month.

How Medicaid Works and What It Covers

Medicaid coverage and income limits are different in every state. Some states cover more services and allow higher income levels; others cover less and have stricter limits. Common services covered by most state Medicaid programs include doctor visits, hospital care, prescription drugs, mental health services, and long-term care in nursing homes. Some states also cover dental care, vision care, and hearing aids, but not all.

To find out what Medicaid covers in your state and whether you might be may be able to access based on your income, you need to contact your state Medicaid office or use your state's online portal. The process for signing up also varies by state — some states use an online process, others require you to explore in person or by mail. Many states have simplified the process in recent years, but the details depend on where you live.

Medicaid is also the primary payer for long-term nursing home care for people who cannot afford it. If you are thinking about future care costs, understanding your state's Medicaid rules for nursing home coverage is important, because the rules about assets and income are strict and vary significantly by state.

When You Have Both Medicare and Medicaid

If you are 65 or older and have low income, you may be may be able to access for both programs. When you have both, Medicare is your primary insurance and pays first, then Medicaid pays some or all of the costs Medicare does not cover. This can mean lower out-of-pocket costs for you, because Medicaid may cover Medicare premiums, deductibles, and copayments.

People who are dual may be able to access often may have access to for special programs that help coordinate care between the two programs. Some states offer programs specifically for dual-may be able to access seniors that combine Medicare and Medicaid benefits. If you think you might be may be able to access for Medicaid while already on Medicare, contact your state Medicaid office to learn about the income and asset limits in your state.

Being dual may be able to access does not happen automatically — you have to explore for Medicaid separately, even if you are already on Medicare. Some people do not realize they are may be able to access until they talk to a counselor or call their state Medicaid office.

Medicare and Medicaid Costs You Will Pay

Medicare has several costs built in. You pay a monthly premium for Part B (the amount changes each year based on your income). You also pay an annual deductible before Medicare starts to pay, and then you pay copayments or coinsurance when you use services. If you choose Part D for prescription drugs, that has its own premium and cost structure. Part A is usually free if you or your spouse paid Medicare taxes for at least 10 years.

Medicaid costs vary widely by state. Some states charge little or nothing for Medicaid services if your income is very low. Other states charge small copayments for doctor visits or prescription drugs. A few states charge monthly premiums for Medicaid, though this is less common. The only way to know what you will pay is to contact your state Medicaid program or speak with a counselor who knows your state's rules.

Both programs have limits on how much you pay out of pocket in a year. Medicare has an out-of-pocket maximum, and Medicaid limits also exist in most states, though the details differ. Understanding these limits helps you plan for health care costs.

How to Learn More About Medicare and Medicaid in Your State

Medicare information is the same everywhere because it is a federal program. You can call Medicare directly at 1-800-MEDICARE (1-800-633-4227) to ask questions about your coverage, costs, or sign-up important date. You can also visit Medicare.gov to read detailed information, compare plans, or find a local counselor. Many communities have free Medicare counseling programs where a trained counselor can answer your specific questions.

Medicaid information changes by state, so you need to contact your state program directly. You can find your state Medicaid office by searching "[your state] Medicaid" online, or you can call 211 (a free helpline) and ask for Medicaid information in your area. Some states have online portals where you can learn about coverage and income limits without calling.

If you are turning 65 soon or think you might be may be able to access for Medicaid, reaching out to a counselor or your state program before you need care saves time and helps you understand your options. Many people find that talking to someone who knows the rules in their state answers questions that general information cannot.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older and have low income and few assets, you may be may be able to access for both. Medicare pays first, then Medicaid covers some or all of what Medicare does not pay. You have to explore for Medicaid separately — it does not happen automatically when you turn 65.

Do I have to pay for Medicare?

Part A is usually free if you or your spouse paid Medicare taxes for at least 10 years. Part B has a monthly premium that changes each year based on your income. Part D (prescription drugs) also has a premium. You also pay deductibles and copayments when you use services.

What is the difference between Medicare Advantage and Original Medicare?

Original Medicare (Parts A and B) is run by the federal government and covers services nationwide. Medicare Advantage (Part C) is run by private insurance companies and usually has a network of doctors you must use, but may include extra benefits like dental or vision. Both cover the same basic services, but costs and rules are different.

How do I know if I am may be able to access for Medicaid?

Medicaid may be able to access depends on your state, your age, your income, and your assets. The income and asset limits are different in every state. Contact your state Medicaid office or call 211 to find out the limits in your state and whether you might be may be able to access.

When should I sign up for Medicare?

You can sign up for Medicare starting three months before the month you turn 65. The sign-up period lasts seven months total. If you sign up late without a valid reason, you will pay a higher premium for as long as you have Medicare, so signing up on time matters.