The Core Difference: Who Pays and Who Gets Coverage

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 and state program that covers people with low incomes at any age. The biggest difference: Medicare is based on age or disability; Medicaid is based on income.

Think of Medicare as something you've already purchased through taxes. Medicaid is a needs-based program — you must have limited income and assets to may have access to. A 67-year-old with a high income gets Medicare automatically. That same person would not get Medicaid. A 35-year-old with very low income might get Medicaid but not Medicare.

Both programs pay hospitals, doctors, and pharmacies directly. Both have rules about which treatments they cover. But they operate under different rules, have different costs to you, and cover different groups of people.

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 incomes and limited assets, and rules vary significantly by state.
  • Medicare has the same rules nationwide; Medicaid rules differ by state, so coverage in one state may not exist in another.
  • You can have both Medicare and Medicaid at the same time — this is called being "dual may be able to access."
  • Medicare requires you to pay premiums, deductibles, and copays; Medicaid costs vary by state but is often free or very low-cost for those who meet income limits.

Who Medicare Covers

You get Medicare at 65 if you or your spouse paid Medicare taxes for at least 10 years (40 quarters). You don't have to be retired. You don't have to be a U.S. citizen, but you must be a permanent resident who has lived in the U.S. for at least five years.

You can also get Medicare before 65 if you have been receiving Social Security Disability Insurance (SSDI) for 24 months, or if you have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS). These are the only exceptions to the age 65 rule.

If you didn't pay Medicare taxes for 10 years, you can still buy Medicare at 65, but your premiums will be higher. Your income does not matter for Medicare — a millionaire and someone living in poverty both pay the same premium if they have the same work history.

Who Medicaid Covers

Medicaid covers people with low incomes and limited assets. The income and asset limits vary by state and change each year. In most states, a single person earning under $1,500 per month might be within range, but this varies widely. Some states are more generous; others are stricter.

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

You must be a U.S. citizen or may have access to immigrant to get Medicaid. Each state runs its own program within federal guidelines, so what you get in one state may be different in another. Some states cover dental care; others don't. Some cover vision; others don't.

What Each Program Covers

Medicare has four parts. Part A covers hospital stays, skilled nursing care, and hospice. Part B covers doctor visits, outpatient care, and some preventive services. Part D covers prescription drugs. Part C (Medicare Advantage) is an alternative way to get Parts A, B, and D through a private insurance company.

Medicare does not cover dental, vision, or hearing aids in most cases. It covers some preventive care (like cancer screenings) at no cost to you, but it does not cover long-term care or custodial care in a nursing home.

Medicaid covers hospital care, doctor visits, prescription drugs, and preventive services like Medicare does. But Medicaid also covers dental care, vision care, and long-term care in nursing homes — services Medicare does not. What Medicaid covers in your state depends on your state's program. You should check your state's Medicaid website or call your state Medicaid office to learn what is covered where you live.

Cost to You: Premiums, Deductibles, and Copays

Medicare Part B costs you a monthly premium (currently around $165 for most people, though it changes yearly). You pay a yearly deductible before Medicare starts paying, and then you pay copays or coinsurance for each service. Part D (prescription drugs) also has a monthly premium that varies by plan.

If you have higher income, you pay higher premiums for Parts B and D. These are called income-related monthly adjustment amounts (IRMAA). The more you earn, the more you pay.

Medicaid costs vary by state. In many states, Medicaid is free if you meet the income limit. In others, you pay a small monthly premium or copay. Some states charge nothing for any service; others charge a few dollars per visit. Check your state's Medicaid program to learn what you would pay.

Being Dual may be able to access: Having Both Medicare and Medicaid

You can have both programs at the same time. This happens when you turn 65 and get Medicare, but your income is low enough to also may have access to for Medicaid. It also happens if you are under 65, on Medicaid, and then become may be able to access for Medicare due to disability.

When you have both, Medicare is your primary insurance — it pays first. Medicaid is secondary — it helps pay what Medicare doesn't cover. This can be very helpful because Medicaid covers things Medicare doesn't, like long-term nursing home care and dental work.

If you think you might be dual may be able to access, contact your state Medicaid office. They can tell you whether you meet the income and asset limits. Some people don't realize they may have access to for both and end up paying more out of pocket than they need to.

How to Find Out Which Program Covers You

For Medicare: If you are 65 or older and a U.S. citizen or permanent resident, you almost certainly may have access to. You must sign up during your Initial Enrollment Period (the three months before, the month of, and three months after your 65th birthday). If you miss this window, you pay a penalty for the rest of your life, so don't delay.

For Medicaid: Contact your state Medicaid office or visit your state's Medicaid website. Each state has a different name for its program (some call it "Medical information" or "Medi-Cal"). You can also call 211 from any phone, and they will connect you to your state's Medicaid program. Have your income and asset information ready.

If you are unsure whether you may have access to for either program, a social worker at your local senior center or Area Agency on Aging can help you figure it out. This service is free.

State Differences in Medicaid

Medicaid rules change from state to state in ways that matter to you. Some states expanded Medicaid in 2014 to cover more working-age adults; others did not. This means a 55-year-old with the same income might get Medicaid in one state and not in another.

Income limits, covered services, and copays all vary. A state might cover dental care but not vision, or vice versa. Some states cover more prescription drugs than others. Before you assume Medicaid won't help you, check what your specific state covers.

You can find your state's Medicaid program by searching "[your state name] Medicaid" online, or by calling 211. The person who answers can tell you the income limits, what services are covered, and how the process works.

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 may may have access to for both. Medicare pays first, and Medicaid covers some of what Medicare doesn't, including long-term nursing home care. Contact your state Medicaid office to see if you meet the income limit.

What happens if I don't sign up for Medicare at 65?

You can still sign up later, but you will pay a penalty on your Part B and Part D premiums for as long as you have Medicare. The penalty is 10% of the premium for each year you were late. It's permanent, so sign up during your Initial Enrollment Period.

Does Medicaid cover nursing home care?

Yes, Medicaid covers long-term nursing home care if you meet your state's income and asset limits. Medicare does not. This is one major difference. However, you must spend down most of your assets before Medicaid will pay for a nursing home — the rules are complex, so talk to a social worker or elder law attorney.

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

No. Medicaid is run by each state, so your coverage ends when you leave. You must explore for Medicaid in your new state. The income limits and covered services may be different. explore as soon as you move so there is no gap in coverage.

How do I know what my state's Medicaid income limit is?

Call 211 or search "[your state name] Medicaid income limits" online. Income limits change yearly and vary by family size and age. Your state Medicaid office can tell you the exact limit for your situation and whether you meet it.