The Basic Difference

Medicare is a federal health insurance program for people 65 and older, regardless of income. Medicaid is a joint federal and state program that covers low-income individuals and families of any age. The two programs are separate, funded differently, and have different rules about who qualifies and what they cover.

Medicare comes from payroll taxes you paid during your working years. Medicaid comes from federal and state tax dollars. Because Medicaid is run by each state, the income limits, covered services, and enrollment rules vary where you live. Medicare is the same everywhere in the country.

You can be on both programs at the same time — this is called being "dual may be able to access." Some people turn 65 and keep their Medicaid coverage while also enrolling in Medicare. Others may have access to for Medicaid later because their income drops.

Key Takeaways

  • Medicare is for people 65 and older; Medicaid is for low-income people of any age, and the income cutoff depends on which state you live in.
  • Medicare is funded by federal payroll taxes and is the same in all states; Medicaid is funded by federal and state money and rules vary by state.
  • Medicare has four parts (A, B, C, D) that cover hospital care, doctor visits, and prescription drugs; Medicaid covers what your state decides, but typically includes doctor visits, hospital care, and emergency services.
  • You pay premiums, deductibles, and copays for Medicare; Medicaid usually costs little or nothing, depending on your state and income.
  • If you are dual may be able to access, Medicare pays first for most services, and Medicaid covers what Medicare does not.

Who Qualifies for Medicare

You are automatically enrolled in Medicare when you turn 65 if you are 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 or have a low income. If you are under 65, you can still may have access to if you have been receiving Social Security disability benefits for 24 months, have end-stage renal disease, or have ALS (amyotrophic lateral sclerosis).

You become may be able to access for Medicare Part A (hospital insurance) at 65 if you or your spouse paid Medicare taxes for at least 10 years while working. If you did not work long enough, you can still buy Part A at 65, but the premium is higher. Part B (doctor visits and outpatient care) requires you to pay a monthly premium, which increases if you have higher income.

Who Qualifies for Medicaid

Medicaid is for people with low income and limited assets. The income limit varies by state and by family size. In some states, a single person earning $1,500 per month might may have access to; in others, the limit is higher. Your state's Medicaid office can tell you the exact threshold for your household size.

Medicaid also covers children, pregnant people, parents of dependent children, and people with disabilities, even if their income is slightly above the standard limit. Some states expanded Medicaid to cover all adults earning up to 138% of the federal poverty level; others did not. This means a person with the same income might may have access to in one state but not another.

You must be a U.S. citizen or may have access to immigrant to enroll in Medicaid. You can explore through your state's Medicaid office, often online or by mail. Unlike Medicare, you do not automatically enroll — you must take the step to sign up.

What Medicare Covers

Medicare Part A covers inpatient hospital stays, skilled nursing facility care after a hospital stay, hospice care, and some home health services. You pay a deductible for each hospital stay, and you pay copays for stays longer than 60 days.

Medicare Part B covers doctor visits, outpatient care, lab tests, imaging, and some preventive services like cancer screenings and vaccines. You pay a monthly premium and a yearly deductible, then 20% of the cost of most services after that.

Medicare Part D covers prescription drugs through private insurance companies. You choose a plan and pay a monthly premium. You also pay out-of-pocket costs for your medications, though the amount depends on which drugs you take and which plan you choose.

Medicare Part C (Medicare Advantage) is an alternative to Parts A and B offered by private insurers. It usually includes prescription drug coverage and may cover dental, vision, or hearing — things Original Medicare does not. You still pay the Part B premium plus a plan premium, and you may pay more out-of-pocket when you use services.

What Medicaid Covers

Every state's Medicaid program must cover doctor visits, hospital care, emergency services, lab tests, and imaging. Most states also cover prescription drugs, mental health services, and substance use treatment. Many states cover dental care, vision care, and hearing aids, though not all.

Medicaid covers long-term care in a nursing home if you meet the program's rules about income and assets. This is a major difference from Medicare, which only covers skilled nursing care for a limited time after a hospital stay. If you need custodial care — help with bathing, dressing, and daily living — Medicare will not pay, but Medicaid may.

Because each state designs its own Medicaid program within federal guidelines, the exact services covered differ. Your state's Medicaid office or website lists what is covered where you live. Some states cover more mental health visits or therapy sessions than others. Some cover more prescription drugs without restrictions.

Cost Differences Between the Two Programs

Medicare requires you to pay premiums, deductibles, and copays. The Part B premium in 2024 is $164.90 per month for most people, but it is higher if your income is above a certain level. The Part A deductible for a hospital stay is $1,632 in 2024. After you meet your deductible, you pay copays for longer stays. These costs can add up quickly if you are hospitalized or need frequent doctor visits.

Medicaid is designed for low-income people, so it costs little or nothing. Most states charge no premium. Some charge small copays — usually $1 to $5 per doctor visit or prescription — but many states waive copays for people with very low income. Pregnant people, children, and emergency services are often free.

If you are on both Medicare and Medicaid, Medicare pays first, and Medicaid covers what Medicare does not pay. This can mean Medicaid pays your Medicare premiums and deductibles, which saves you money.

When You Might Have Both Programs

You can be enrolled in both Medicare and Medicaid at the same time. This happens when you turn 65 and are still low-income, or when your income drops after you turn 65 and you become may be able to access for Medicaid. People who are dual may be able to access often have lower out-of-pocket costs because Medicaid fills in gaps that Medicare leaves.

If you are dual may be able to access, you enroll in Medicare the normal way at 65. You then explore for Medicaid through your state's office. Your state will determine how much Medicaid covers based on your income and what Medicare already pays. Some dual-may be able to access people have their Medicare premiums and deductibles paid by Medicaid, which is called a "Medicare Savings Program."

If you think you might may have access to for Medicaid while on Medicare, contact your state's Medicaid office or call 211 to find the local office. The income limits and rules are different in each state, so it is worth checking even if you were told you did not may have access to before.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older and have low income, you can be enrolled in both. Medicare pays first for most services, and Medicaid covers costs Medicare does not pay. This can lower your out-of-pocket expenses significantly.

What happens to my Medicaid when I turn 65 and get Medicare?

Your Medicaid does not automatically end. You stay on Medicaid if you still meet your state's income and asset limits. You will be enrolled in Medicare at 65, and you can keep Medicaid at the same time. Contact your state's Medicaid office to make sure your coverage continues.

Does Medicare cover nursing home care?

Medicare covers skilled nursing care for up to 100 days after a hospital stay, but only if you need skilled care like wound care or physical therapy. It does not cover long-term custodial care — help with daily living. Medicaid covers long-term nursing home care if you meet income and asset rules.

Why do the Medicaid rules change depending on where I live?

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 providers. This is why a person might may have access to for Medicaid in one state but not another.

How do I know if I may have access to for Medicaid while on Medicare?

Contact your state's Medicaid office directly or call 211 to reach your local office. They will tell you the current income limit for your household size and whether you may have access to. Income limits change, so it is worth checking even if you were told no in the past.