The Basic Difference Between Medicare and Medicaid
Medicare is a federal insurance program for people 65 and older, regardless of income. Medicaid is a joint federal and state program that covers people with low income, at any age. They are separate programs with different rules, different funding sources, and different coverage.
The confusion is understandable — the names sound alike and both help pay medical bills. But they operate completely differently. Medicare comes from Social Security taxes you paid during your working years. Medicaid comes from federal and state tax dollars and is means-tested, meaning your income and assets determine whether you may have access to.
Some people are covered by both programs at the same time. These individuals are sometimes called "dual may be able to access." Understanding which program covers what helps you know where to send bills, what your costs will be, and what services are available to you.
Key Takeaways
- Medicare is for people 65 and older; Medicaid is for people with low income at any age, with rules that vary by state.
- Medicare is a federal program funded by payroll taxes; Medicaid is jointly funded and run by states, so coverage differs where you live.
- Medicare covers hospital care, doctor visits, and some prescription drugs; Medicaid covers those plus long-term care and dental in many states.
- You can be covered by both programs at the same time if you meet the income and age requirements for each.
- Your state Medicaid office and Medicare.gov are the official sources for your specific coverage and costs in your location.
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 or have a low income — Medicare is available to everyone who meets the age and residency requirement.
Some people under 65 can also get Medicare if they have received Social Security Disability Insurance (SSDI) for at least two years, or if they have end-stage renal disease or ALS (amyotrophic lateral sclerosis). But the vast majority of Medicare beneficiaries are 65 and older.
Medicare has four parts: Part A (hospital insurance), Part B (medical insurance for doctor visits and outpatient care), Part D (prescription drug coverage), and Part C (Medicare Advantage, an alternative way to get Parts A and B through a private insurer). Most people pay a monthly premium for Part B and Part D, though Part A is usually free if you or your spouse paid Medicare taxes for at least 10 years.
Who Medicaid Covers
Medicaid covers people with low income and limited assets. The exact income and asset limits vary by state and by category — there are different rules for children, pregnant people, parents, seniors, and people with disabilities. A single adult in one state might may have access to with an income of $1,500 per month, while the same income in another state would disqualify them.
Medicaid is the largest source of coverage for long-term care in the United States, including nursing home care and in-home care services. It also covers dental care, vision care, and hearing aids in many states — services Medicare does not cover. Because Medicaid rules differ by state, you need to contact your state Medicaid office to learn what you may have access to for where you live.
Some states have expanded Medicaid to cover more working-age adults with low income; others have not. This means a 40-year-old with the same income might have Medicaid in one state and no coverage in another. Your state's Medicaid website will show you the current income limits and covered services.
What Each Program Covers
| Service | Medicare | Medicaid |
|---|---|---|
| Hospital stays | Yes (Part A) | Yes |
| Doctor visits | Yes (Part B) | Yes |
| Prescription drugs | Yes (Part D) | Yes |
| Nursing home care | Limited (up to 100 days after hospital stay) | Yes, long-term |
| In-home care services | Limited (skilled nursing only) | Yes, in many states |
| Dental care | No | Yes, in many states |
| Vision care | No | Yes, in many states |
| Hearing aids | No | Yes, in some states |
Medicare covers acute care — treatment for illness and injury — but has limits on long-term services. If you need a nursing home for more than 100 days, or if you need help with daily living activities like bathing and dressing, Medicare will not pay. Medicaid, by contrast, is designed to cover long-term care and is the primary payer for most people in nursing homes.
Medicaid also covers services that Medicare does not, such as dental work, eyeglasses, and hearing aids. However, these services are not covered in every state, and the scope of coverage varies. Some states cover comprehensive dental care; others cover only emergency dental treatment. You need to check your state's Medicaid program to know what is available to you.
When You Have Both Medicare and Medicaid
If you are 65 or older with low income and limited assets, you may be covered by both programs. Medicaid is the "secondary payer," meaning Medicare pays first, and Medicaid covers costs that Medicare does not pay — such as copayments, coinsurance, and deductibles. Medicaid may also cover services Medicare does not, like dental and vision care.
Being dual may be able to access can significantly reduce your out-of-pocket costs. For example, if Medicare covers a doctor visit but charges a $15 copayment, Medicaid may cover that copayment. If you need a service Medicare does not cover, Medicaid may pay for it directly.
To be dual may be able to access, you must meet the income and asset limits set by your state for Medicaid. These limits are usually higher for people 65 and older than for working-age adults, but they vary. Contact your state Medicaid office to find out whether you may have access to.
How to Find Out What You may have access to For
For Medicare information, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227). You can learn about your coverage options, find out what your costs will be, and get answers to questions about specific services. Medicare.gov also has a tool to compare prescription drug plans and Medicare Advantage plans in your area.
For Medicaid, contact your state Medicaid office directly. You can find your state office through the Centers for Medicare and Medicaid Services (CMS) website at medicaid.gov, which has links to each state program. Your state office will tell you the current income limits, what services are covered, and how the process works if you think you may may have access to.
If you are 65 or older and think you might may have access to for both programs, start by contacting your state Medicaid office. They can tell you whether your income and assets meet the state's limits. If you may have access to, Medicaid will coordinate with Medicare to reduce your costs.
Costs and Out-of-Pocket Expenses
Medicare has monthly premiums, annual deductibles, and copayments or coinsurance for most services. Part B premium in 2024 varies based on income but starts at $174.70 per month for most beneficiaries. Part A has no premium for most people but has a deductible of $1,632 per hospital stay. Part D (prescription drug coverage) also has a monthly premium that varies by plan.
Medicaid has no monthly premium in most states, though some states charge small copayments for certain services. The copayment amounts are usually much lower than Medicare's, and Medicaid cannot charge copayments for emergency services, preventive care, or certain other services. If you are dual may be able to access, Medicaid typically covers your Medicare premiums and cost-sharing.
Your actual costs depend on which services you use, which plan you choose (if you have options), and your state's rules. Using Medicare.gov and your state Medicaid office, you can get an estimate of what you will pay for the services you expect to need.
Frequently Asked Questions
Can I have Medicare and Medicaid at the same time?
Yes. If you are 65 or older and meet your state's income and asset limits for Medicaid, you can be covered by both. Medicaid will pay some of your Medicare costs, such as premiums and copayments, and may cover services Medicare does not.
What if I am under 65 and have low income?
You may be covered by Medicaid, depending on your state's rules. Some states cover working-age adults with low income; others do not. Contact your state Medicaid office to find out whether you may have access to. You would not be covered by Medicare unless you have SSDI, end-stage renal disease, or ALS.
Does Medicare cover dental work and eyeglasses?
No. Medicare does not cover routine dental care, eyeglasses, or hearing aids. If you have Medicaid as well, Medicaid may cover these services in your state, but coverage varies. Check with your state Medicaid office about what dental and vision services are available.
How do I know which program should pay my doctor bill?
If you have both Medicare and Medicaid, give your doctor both insurance cards. Medicare will be billed first, and Medicaid will be billed second for any remaining costs. Your doctor's office handles the coordination; you do not need to do anything.
What if I disagree with a decision Medicare or Medicaid made about my coverage?
Both programs have appeal processes. For Medicare, you can request a reconsideration through Medicare.gov or by calling 1-800-MEDICARE. For Medicaid, contact your state Medicaid office to learn about your state's appeal process. You have the right to challenge a denial of coverage.