The Core Difference Between Medicare and Medicaid

Medicare is a federal health insurance program run by the Centers for Medicare & Medicaid Services (CMS). You become covered when you turn 65, regardless of income, or earlier if you receive Social Security Disability Insurance (SSDI) or have end-stage renal disease. You pay into Medicare through payroll taxes during your working years.

Medicaid is a joint federal and state program that covers people with low income. Each state sets its own income limits and decides which services to cover, so what Medicaid pays for in one state may differ from another. You do not need to have paid into Medicaid to receive it—may be able to access is based on current income and household size.

The simplest way to remember the difference: Medicare is based on age or disability status and is the same nationwide. Medicaid is based on income and varies by state.

Key Takeaways

  • Medicare covers people 65 and older, some younger people with disabilities, and people with end-stage renal disease, regardless of how much money they have.
  • Medicaid covers people with low income, and the income limits and covered services change depending on which state you live in.
  • You can have both Medicare and Medicaid at the same time—this combination is sometimes called "dual may be able to access."
  • Medicare Part A covers hospital stays, Part B covers doctor visits and outpatient care, and Part D covers prescription drugs; Medicaid covers whatever your state decides to include.
  • Enrollment in Medicare happens automatically at 65 if you receive Social Security, but you must actively enroll in Medicaid through your state.

Who Medicare Covers

You are covered by Medicare when you turn 65, even if you are still working. If you have been receiving SSDI for 24 months, you become covered before age 65. People of any age with end-stage renal disease (permanent kidney failure requiring dialysis or transplant) are also covered.

Medicare does not check your income or assets. A person with a million dollars in the bank and a person with nothing both pay the same Medicare premiums at 65. Your coverage does not depend on how much money you have—only on your age or disability status.

Who Medicaid Covers

Medicaid covers people whose income falls below a certain threshold set by their state. In most states, a single adult with monthly income under roughly $1,400 to $1,500 may be covered, though this varies significantly. Some states are more generous; others are stricter. Your state's Medicaid program is the only source that can tell you the exact income limit where you live.

Medicaid also considers household size, assets in some cases, and citizenship status. Unlike Medicare, Medicaid is means-tested—meaning your financial situation directly determines whether you may have access to. You must explore through your state's Medicaid office or a local health department, and approval is not automatic.

What Each Program Pays For

Medicare Part A covers hospital inpatient stays, skilled nursing facility care after a hospital stay, hospice, and some home health services. Medicare Part B covers doctor office visits, outpatient surgery, lab tests, and preventive care. Medicare Part D is prescription drug coverage you can add. Medicare does not cover dental, vision, or hearing aids unless you purchase a supplemental plan.

Medicaid coverage varies by state. All states must cover certain basics—hospital care, doctor visits, lab work, and X-rays—but states choose whether to cover dental, vision, hearing aids, and other services. Some states cover more than others. Your state's Medicaid program publishes a list of covered services on its website.

How Costs Work for Each Program

Medicare requires you to pay a monthly premium for Part B (currently around $165 per month for most people, though higher earners pay more), a deductible before coverage kicks in, and copayments or coinsurance when you use services. You also pay the full cost of services Medicare does not cover, like dental work or glasses.

Medicaid costs vary by state. Some states charge no premium or copayment; others charge small amounts. Low-income people on Medicaid typically pay less out of pocket than Medicare beneficiaries, but the exact cost depends on your state's rules and your specific situation.

When You Can Have Both Programs

You can be covered by both Medicare and Medicaid at the same time. This happens when you are 65 or older (or disabled and on Medicare) and your income is low enough to also may have access to for Medicaid. People in this situation are called "dual may be able to access."

When you have both, Medicare is your primary insurance and pays first. Medicaid then covers some of the costs Medicare does not pay, like copayments and deductibles. This can significantly reduce your out-of-pocket costs. To be dual may be able to access, you must be enrolled in Medicare and meet your state's Medicaid income limits.

How to Enroll in Each Program

If you receive Social Security, you are automatically enrolled in Medicare Part A and Part B when you turn 65. If you do not receive Social Security, you must contact Social Security directly to enroll. You can sign up online at ssa.gov, by phone at 1-800-772-1213, or in person at a local Social Security office.

Medicaid enrollment happens through your state. Contact your state's Medicaid office, your county health department, or visit your state's health insurance marketplace website to find the process. Some states allow online applications; others require you to explore by mail or in person. Each state has its own process and timeline for approval.

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 meet your state's Medicaid limits, you can have both. Medicare pays first, and Medicaid covers some of the remaining costs. Contact your state's Medicaid office to see if you may have access to.

What if I am under 65 and do not have a disability?

You would not be covered by Medicare. You may be covered by Medicaid if your income is low enough for your state. You can also purchase private health insurance through your state's health insurance marketplace or through an employer.

Does Medicare cover dental and vision care?

Original Medicare does not cover routine dental, vision, or hearing care. You can purchase a supplemental plan (called Medigap) or a Medicare Advantage plan that may include these services, though coverage varies. Medicaid coverage of dental and vision depends on your state.

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

Contact your state's Medicaid office directly—the number is on your state health department website. Income limits change and vary by household size, so the office can tell you whether your specific situation qualifies. You can also call 211 to be connected to local Medicaid information.

What happens to my Medicare if I move to a different state?

Medicare coverage stays the same no matter where you live—it is federal. Your Medicaid coverage may change because each state has different income limits and covered services. Contact your new state's Medicaid office after you move to see if you still may have access to.