The Basic Difference
Medicare is a federal insurance program you pay into through payroll taxes during your working years. You become may be able to access at 65 regardless of income. Medicaid is a joint federal and state program that covers people with low income, regardless of age. The two programs have different rules, different costs, and cover different groups of people — but they sometimes overlap, and you can have both at the same time.
The confusion is understandable because both are government health programs and both use similar names. But they are run by different agencies, funded differently, and have completely different may be able to access rules. Understanding which one you might use — or whether you may have access to for both — matters because it changes what you pay and what doctors you can see.
Key Takeaways
- Medicare is based on age (65 and older) or disability, while Medicaid is based on income and varies by state.
- Medicare is the same nationwide; Medicaid rules, coverage, and payment rates differ significantly from state to state.
- You pay Medicare premiums and deductibles; Medicaid costs little or nothing, depending on your state and income.
- Some people may have access to for both programs at the same time, which is called "dual may be able to access" status.
- Your state of residence determines whether you can get Medicaid and what it covers, so the program available to you depends on where you live.
Who Pays Into Each Program and How It Works
You pay for Medicare through FICA taxes (Federal Insurance Contributions Act) while you work — 1.45 percent of your wages goes to Medicare, and your employer matches it. This money goes into a trust fund. When you turn 65, you become may be able to access to draw from that fund, whether you are rich or poor. You do not have to prove financial need.
Medicaid is funded by federal and state taxes, and states decide how much of their own money to put in. Because of this, Medicaid is not the same everywhere. Some states cover more people and more services; others cover fewer. A person who qualifies for Medicaid in one state might not may have access to in another state, even with the same income.
With Medicare, you pay a monthly premium (the amount is the same for everyone at your income level), an annual deductible, and copays or coinsurance when you use services. With Medicaid, you typically pay nothing or very little — some states charge small copays for certain services, but many charge nothing at all.
Income and may be able to access: The Core Difference
Medicare does not ask about your income. If you are 65 or older, you are may be able to access. If you are under 65 but have received Social Security Disability Insurance (SSDI) for 24 months, you are may be able to access. If you have end-stage renal disease or ALS (amyotrophic lateral sclerosis), you are may be able to access regardless of age. Income does not matter.
Medicaid is almost entirely based on income. To may have access to, your income must be below a certain level set by your state. That level varies widely — some states set it at 100 percent of the federal poverty line, others at 138 percent or higher. Your state also looks at your assets (savings, property) in some cases. Because Medicaid rules change by state, you need to check your specific state's program to know whether you may have access to.
This is why a retired person with a modest pension might have Medicare but not Medicaid, while a younger person with very low income might have Medicaid but not Medicare. The programs serve different populations based on different criteria.
What Each Program Covers
Medicare covers hospital stays (Part A), doctor visits and outpatient care (Part B), prescription drugs (Part D), and optional supplemental or managed care plans (Medigap or Part C). It does not cover dental, vision, or hearing aids in most cases, and it does not cover long-term care in a nursing home unless it follows a hospital stay.
Medicaid covers doctor visits, hospital stays, and prescription drugs like Medicare does, but it also covers services Medicare does not: dental care, vision care, hearing aids, and long-term care in a nursing home if you meet the medical and financial requirements. Medicaid also covers transportation to medical appointments in many states. However, what Medicaid covers varies by state — your state may cover dental but not vision, or vice versa.
Both programs cover preventive care (screenings, vaccines) at no cost to you. Both require you to use doctors and hospitals that are in their network, though the networks are different.
Cost Differences: Premiums, Deductibles, and Copays
| Cost Type | Medicare | Medicaid |
|---|---|---|
| Monthly Premium | Yes (varies by income and plan) | Usually none |
| Annual Deductible | Yes (Part A and Part B) | Usually none |
| Copay per Visit | Yes (typically $15–$50) | None or very small ($1–$3) |
| Coinsurance | Yes (20% of costs after deductible) | Usually none |
Medicare costs money out of your pocket. In 2024, the standard Part B premium is $164.90 per month, but it can be higher if your income is above a certain threshold. You also pay a $240 annual deductible for Part B and $1,632 for Part A. After that, you pay 20 percent coinsurance for most services. If you add prescription drug coverage (Part D), that is another premium, usually $30 to $100 per month depending on the plan.
Medicaid is designed for people with low income, so it costs very little or nothing. Most states charge no premium and no deductible. Some charge small copays — $1 to $3 per visit — but many states charge nothing. This is one of the biggest practical differences: Medicare requires you to budget for regular out-of-pocket costs, while Medicaid typically does not.
When You Can Have Both Programs at Once
If you are 65 or older and your income is low enough to may have access to for Medicaid in your state, you can have both Medicare and Medicaid at the same time. This is called dual may be able to access status. Medicaid becomes your "secondary" payer — it covers costs that Medicare does not pay, like copays, deductibles, and services Medicare does not cover.
Dual may be able to access status is valuable because it reduces your out-of-pocket costs significantly. Medicare pays first, then Medicaid covers what Medicare leaves behind. If you are on a fixed income and your income is low, you may may have access to for both. To find out, contact your state Medicaid office or call 211 to be referred to a local benefits counselor who can check your specific situation.
Some people also may have access to for Medicare Savings Programs (MSP), which help pay Medicare premiums and deductibles if your income is slightly above the Medicaid limit. These are state-run programs that work similarly to Medicaid but have higher income limits.
State-by-State Differences in Medicaid
Because Medicaid is run jointly by states and the federal government, the program you have access to depends on where you live. Some states have expanded Medicaid to cover people earning up to 138 percent of the federal poverty line; others have not expanded and cover only people earning much less. Some states cover dental and vision; others do not. Some states charge copays; others do not.
If you move to a different state, your Medicaid coverage may change or end. You will need to reapply in your new state and may find that you no longer may have access to, or that the coverage is different. Medicare, by contrast, is the same everywhere — if you have Medicare in one state, you have the same coverage in another.
This is why it is important to know the rules in your specific state. What is true in California may not be true in Texas. A benefits counselor or your state Medicaid office can tell you what is available where you live.
How to Find Out Which Program You may have access to For
If you are 65 or older, you automatically may have access to for Medicare. You do not have to do anything except sign up during your enrollment period (usually the three months before, during, and after your 65th birthday). If you miss that window, you can still enroll, but you may pay a penalty.
To learn about you may have access to for Medicaid, contact your state Medicaid office directly or call 211 (a free referral service). You will need to provide information about your income and assets. The process is different in each state — some allow you to explore online, others require an in-person visit or phone interview. A benefits counselor can walk you through the process and tell you what documents to bring.
If you think you might may have access to for both programs, a Medicare counselor (available free through your State Health Insurance information Program, or SHIP) can review your situation and help you understand your options. These counselors are trained specifically to help people with Medicare and can answer questions about Medicaid as well.
Frequently Asked Questions
Can I have Medicare and Medicaid at the same time?
Yes. If you are 65 or older and your income is low enough to may have access to for Medicaid in your state, you can have both. Medicaid will pay some of the costs that Medicare does not cover, like deductibles and copays. This status is called "dual may be able to access."
What happens to my Medicaid if I turn 65 and get Medicare?
You do not automatically lose Medicaid when you turn 65. If you still may have access to based on income, you keep it. Your Medicaid will work alongside your Medicare to cover additional costs. However, if your income is above your state's Medicaid limit, your Medicaid will end when you turn 65.
Is Medicare the same in every state?
Yes. Medicare coverage, premiums, and deductibles are the same nationwide. However, the doctors and hospitals that accept Medicare may vary by location, so your network of providers could be different depending on where you live.
Why is Medicaid so different from state to state?
Medicaid is a partnership between the federal government and individual states. Each state designs its own program within federal guidelines, decides income limits, chooses what services to cover, and sets payment rates to doctors. This is why a person who qualifies in one state might not may have access to in another.
What should I do if I think I may have access to for Medicaid but am not sure?
Call 211 or contact your state Medicaid office directly. You can also ask for a benefits counselor through your State Health Insurance information Program (SHIP). These services are free and can tell you whether you may have access to based on your specific income and situation.