Medicaid and Medicare are two separate government health programs with different rules, funding sources, and who they serve

Medicare is a federal health insurance program for people age 65 and older, regardless of income. It is also available to some younger people with disabilities and people with end-stage renal disease. Medicaid is a joint federal and state program that covers low-income individuals and families of any age. The two programs have different may be able to access rules, different benefits, and different costs — and you may be covered by one, both, or neither depending on your age and income.

The confusion is understandable because both are government health programs with similar-sounding names. But they operate under different laws, are funded differently, and have different requirements. Understanding which one you might be covered by matters because it changes what doctors you can see, what prescriptions are covered, and what you pay out of pocket.

Key Takeaways

  • Medicare is for people 65 and older, while Medicaid is for low-income individuals and families of any age.
  • Medicare is funded by federal payroll taxes and is the same in every state, while Medicaid is jointly funded by federal and state money and rules vary by state.
  • Some people may have access to for both programs at the same time, a situation called "dual may be able to access."
  • Medicare has four parts (A, B, C, and D) covering different services, while Medicaid covers a broader range of services but the exact coverage depends on your state.
  • You pay premiums and cost-sharing for Medicare, while Medicaid typically has lower or no premiums for those who may have access to.

How Medicare and Medicaid differ in who they cover

Medicare is primarily for people age 65 and older. You become may be able to access automatically when you turn 65 if you or your spouse paid Medicare taxes while working. You do not have to be retired or have a low income — Medicare is available to anyone who meets the age requirement. There are also pathways to Medicare before age 65 if you have been receiving Social Security disability benefits for 24 months, have end-stage renal disease, or have ALS (amyotrophic lateral sclerosis).

Medicaid is based on income and family size, not age. Each state sets its own income limits, so the threshold for coverage varies depending on where you live. Medicaid also covers children, pregnant people, parents, elderly people with low incomes, and people with disabilities. A person can be on Medicaid at any age if their income is low enough and they meet their state's other requirements.

Funding and how each program operates

Medicare is funded through payroll taxes that workers and employers pay during their working years. These taxes go into a trust fund, and Medicare benefits are paid from that fund. Because it is a federal program, the rules and benefits are the same no matter which state you live in. When you turn 65, you enroll in Medicare through the federal government, and your coverage works the same way in every state.

Medicaid is funded jointly by the federal government and individual states. Each state designs its own Medicaid program within federal guidelines, which means coverage, income limits, and which services are covered can differ significantly from state to state. A service covered by Medicaid in one state may not be covered in another. You explore for Medicaid through your state or county, not through the federal government.

What Medicare covers versus what Medicaid covers

Medicare has four parts. Part A covers hospital stays, skilled nursing facility care, hospice, and some home health care. Part B covers doctor visits, outpatient services, and some preventive care. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative way to receive Parts A and B through a private insurance company, and most Part C plans include prescription drug coverage.

Medicaid covers a broader range of services than Medicare, including doctor visits, hospital care, prescription drugs, dental care, vision care, and long-term care services like nursing home or home and community-based services. However, the exact services covered depend on your state's Medicaid program. Some states cover dental care for adults; others do not. Some cover vision care; others limit it. You need to check your specific state's Medicaid program to know what is covered.

Cost differences between the two programs

Medicare requires you to pay premiums, deductibles, and copayments. Most people pay a monthly premium for Part B (the amount changes yearly). You also pay a deductible before Medicare starts paying for hospital care under Part A, and you pay copayments or coinsurance when you use services. Prescription drug coverage under Part D requires a separate premium and has its own deductibles and copayments. The total out-of-pocket costs can add up, which is why many Medicare beneficiaries also buy supplemental insurance.

Medicaid typically has much lower or no premiums for those who are covered. Some states charge small copayments for services, but many Medicaid programs charge nothing. Because Medicaid is designed for low-income people, the cost-sharing is generally much lower than Medicare. However, because rules vary by state, some states may charge small premiums or copayments while others do not.

When someone can have both Medicare and Medicaid at the same time

Some people may have access to for both programs simultaneously. This happens when someone is 65 or older (or qualifies for Medicare through disability) and also has income low enough to meet their state's Medicaid limits. These people are called "dual may be able to access" or "dually may be able to access." In this situation, Medicare is the primary payer, meaning it pays first, and Medicaid covers some of the costs that Medicare does not pay, like copayments and deductibles.

Being dual may be able to access can be beneficial because you have access to a wider range of services and lower out-of-pocket costs. However, it also means you are working with two different programs that have different rules, which can sometimes be confusing. Some states have special programs designed specifically for dual may be able to access individuals to make coordination easier.

How to find out which program you might be covered by

If you are 65 or older, you are likely may be able to access for Medicare. You should enroll during your initial enrollment period, which begins three months before the month you turn 65 and ends three months after. You can enroll through Medicare.gov or by calling 1-800-MEDICARE.

If you have a lower income, you may be covered by Medicaid regardless of age. To learn about you may have access to, contact your state or county Medicaid office. You can also call 211 (a free referral service) or visit your state's Medicaid website to learn about income limits and how the process works. Each state has different rules, so the process and requirements vary depending on where you live.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older and have a low income, you may be covered by both programs. Medicare pays first, and Medicaid helps cover some of the costs Medicare does not pay, such as copayments and deductibles. This is called being "dual may be able to access."

Do I have to pay for Medicare?

Yes. Medicare requires monthly premiums for Part B and Part D, plus deductibles and copayments when you use services. However, if you also may have access to for Medicaid, Medicaid may help pay some of these costs. The amount you pay depends on your income and which parts of Medicare you enroll in.

Is Medicaid the same in every state?

No. Each state runs its own Medicaid program within federal guidelines. Income limits, covered services, and copayments vary by state. A service covered in one state may not be covered in another, so you need to check your specific state's rules.

What happens to my Medicare when I turn 65?

You become may be able to access for Medicare at 65, but you must enroll during your initial enrollment period (three months before through three months after your 65th birthday) to avoid penalties. You can enroll through Medicare.gov or by calling 1-800-MEDICARE. If you are still working and have employer health insurance, you may be able to delay enrollment without penalty.

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

Medicaid is based on income and family size, and rules vary by state. Contact your state or county Medicaid office, call 211, or visit your state's Medicaid website to learn the income limits and requirements where you live. You can also ask about coverage for specific services you need.