The Core Difference: Who Pays and Who Gets Covered

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-state program that covers people with low income, regardless of age. The two programs serve different groups of people and work in completely different ways.

Think of Medicare as something you've already paid for. Medicaid is a safety net program funded by tax dollars, designed to help people who cannot afford health insurance on their own. You can have both at the same time — this is called "dual coverage" — but they are separate programs with separate rules.

The confusion is understandable because both programs started around the same time (1965), both use the word "medical," and both are government-run. But they answer two different questions: Medicare asks "Did you work and pay taxes?" while Medicaid asks "Can you afford to pay for health care?"

Key Takeaways

  • Medicare covers people 65 and older, some younger people with disabilities, and people with end-stage renal disease, regardless of income.
  • Medicaid covers people with low income and limited resources, and rules vary significantly by state.
  • You pay Medicare premiums and deductibles based on your income and coverage choices; Medicaid costs little or nothing out of pocket for those who may have access to.
  • Medicare is the same in every state; Medicaid benefits and income limits differ depending on where you live.
  • Some people may have access to for both programs at the same time, and when they do, Medicare pays first and Medicaid fills in gaps.

Who Medicare Covers

You are covered by Medicare if you are 65 or older and a U.S. citizen or permanent resident who has lived in the country for at least five years. You do not have to be retired — you can still be working. You do not have to be poor. Your income and savings do not matter.

Some people under 65 also may have access to: those who have received Social Security Disability Insurance (SSDI) for 24 months, those with end-stage renal disease (permanent kidney failure), and those with amyotrophic lateral sclerosis (ALS). For these groups, age does not matter.

You become covered automatically at 65 if you are already receiving Social Security. If you are not yet receiving Social Security, you must sign up during your initial enrollment period, which begins three months before the month you turn 65 and ends three months after. Missing this window can result in permanent penalties on your premiums.

Who Medicaid Covers

Medicaid covers people with low income and limited resources. The exact income and resource limits vary by state and change each year. In most states, a single person with income below roughly $1,500 per month may may have access to, but this number is different in every state. Some states are more generous; others are stricter.

Medicaid also covers certain groups regardless of income: pregnant women in most states, children under 19, parents of dependent children (in states that have expanded Medicaid), and people over 65 with very limited resources. Again, the exact rules depend on your state.

To find out whether you might may have access to, you need to contact your state's Medicaid office or use your state's online portal. The income limit for your household size in your state is the only number that matters — national averages are not useful because your state's rules may be different.

How Much You Pay: Premiums, Deductibles, and Copays

Medicare requires you to pay a monthly premium for Part B (doctor visits and outpatient care). In 2024, this is $164.90 per month for most people, though it is higher if your income is above a certain level. You also pay an annual deductible before Medicare starts to pay — $240 in 2024 for Part B. After that, you typically pay 20 percent of the cost of covered services.

If you choose to add prescription drug coverage (Part D), you pay a separate monthly premium that varies by plan. If you choose to add hospital coverage (Part A), there is a deductible of $1,632 per hospital stay in 2024. Many people buy supplemental insurance (called Medigap) to cover these gaps, which adds another monthly cost.

Medicaid costs little or nothing if you may have access to. Most states charge no monthly premium. Some charge small copays — typically $1 to $5 per doctor visit or prescription — but many states waive copays for people over 65 or for certain services. Pregnant women and children usually pay nothing.

What Services Each Program Covers

Medicare covers doctor visits, hospital stays, lab tests, imaging, and some preventive care at no cost to you (after you meet your deductible). It covers some mental health services and some rehabilitation. It does not cover dental, vision, or hearing aids — these are major gaps for many seniors.

Medicaid covers similar services: doctor visits, hospital stays, lab work, and imaging. It also covers services Medicare does not: dental care, vision care, hearing aids, and long-term care (nursing home and home care). Medicaid is often more generous for these services, which is why many people with both programs rely on Medicaid for dental and vision.

Both programs cover prescription drugs, but the way they work is different. Medicare Part D is optional and you choose a plan; Medicaid drug coverage is automatic in most states. Both have lists of covered drugs (called formularies), and both may require you to try a cheaper drug first before covering a more expensive one.

State Differences: Why Your Location Matters for Medicaid

Medicare is identical in every state. The premiums, deductibles, covered services, and rules are the same whether you live in California or Maine.

Medicaid is not. Each state runs its own program within federal guidelines. One state may cover dental care; another may not. One state's income limit may be $1,200 per month; another's may be $2,000. One state may cover long-term care generously; another may have long waiting lists. If you move to a different state, your Medicaid coverage may change.

This is why you cannot get a useful answer to "Do I may have access to for Medicaid?" without knowing your state. The same income and family situation that qualifies you in one state may not may have access to you in another.

What Happens If You Have Both Medicare and Medicaid

If you may have access to for both programs — usually because you are 65 or older with very low income — you are called a "dual may be able to access" person. This is actually a good situation because the two programs work together to cover more of your costs.

Medicare pays first for services it covers. Medicaid then pays the Medicare premiums, deductibles, and copays you cannot afford. Medicaid also covers services Medicare does not, like dental and long-term care. The result is that your out-of-pocket costs are much lower than if you had Medicare alone.

Some states have special programs for dual-may be able to access people that coordinate the two programs more closely. Ask your state Medicaid office whether you are in one of these programs and what it means for your coverage.

Frequently Asked Questions

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

Yes. If you are 65 or older and have low income and limited resources, you may may have access to for both. When you have both, Medicare pays first, and Medicaid covers what Medicare does not. This usually means much lower out-of-pocket costs for you.

What if I turn 65 and I am still on Medicaid?

You will keep your Medicaid coverage. You will also need to sign up for Medicare Part A and Part B during your initial enrollment period (three months before to three months after your 65th birthday). You will have both programs, and they will work together to pay your medical bills.

Does my state's Medicaid cover the same things as another state's?

No. Each state decides what services to cover within federal rules. Dental, vision, hearing aids, and long-term care coverage varies widely. If you move to a new state, contact that state's Medicaid office to learn what your new coverage includes.

If I am on Medicare, do I need to do anything about Medicaid?

Not unless your income drops significantly. If you have low income and limited resources, you may become may be able to access for Medicaid later in life. Contact your state Medicaid office to learn the income and resource limits in your state and whether you might may have access to.

Why does Medicare not cover dental and vision?

Medicare was designed to cover acute medical care — treating illness and injury. Dental and vision care were considered separate from medical care when the program started in 1965, and that structure has remained. If you need dental or vision coverage, you can buy a separate plan, or you may may have access to for Medicaid, which covers these services in most states.