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

Medicare is a federal health insurance program run by the Centers for Medicare & Medicaid Services (CMS). It is primarily for people age 65 and older, regardless of income. Some younger people with disabilities or end-stage renal disease also may have access to. Medicare is funded through payroll taxes (the money taken from your paychecks during your working years).

Medicaid is a joint federal and state program that pays for health care for people with low incomes. Each state runs its own Medicaid program within federal guidelines, so the income limits, covered services, and rules differ by state. Medicaid is funded through federal and state tax dollars, not payroll taxes.

The programs overlap in one important way: some people are covered by both Medicare and Medicaid at the same time. These people are called "dual may be able to access." But the two programs operate independently, have different enrollment processes, and cover different services.

Key Takeaways

  • Medicare is a federal program for people 65 and older; Medicaid is a state-run program for people with low incomes of any age.
  • Medicare is funded by payroll taxes you paid during your working years; Medicaid is funded by federal and state tax dollars.
  • You enroll in Medicare through Social Security; you enroll in Medicaid through your state's health department or social services office.
  • Some people may have access to for both programs at the same time and are called dual may be able to access.
  • Each state's Medicaid program has different income limits and covered services, so what you get in one state may differ in another.

How Medicare Works and Who It Covers

Medicare has four parts. Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Part B covers doctor visits, outpatient care, and some preventive services. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative to Parts A and B offered by private insurance companies approved by Medicare.

You become may be able to access for Medicare the month you turn 65 if you have worked and paid Medicare taxes for at least 10 years (40 quarters). If you are under 65, you may be may be able to access if you have received Social Security Disability Insurance (SSDI) for 24 months, or if you have end-stage renal disease or ALS (amyotrophic lateral sclerosis). You enroll through Social Security, either online at ssa.gov, by phone at 1-800-772-1213, or in person at your local Social Security office.

Medicare has a yearly enrollment period. If you do not enroll when you first become may be able to access, you may pay a penalty for the rest of your life. The general enrollment period runs from January 1 to March 31 each year, but if you turn 65, you have a seven-month window centered on your birthday month to enroll without penalty.

How Medicaid Works and Who It Covers

Medicaid covers doctor visits, hospital care, prescription drugs, mental health services, and long-term care (nursing homes and home care). The exact services covered vary by state. Some states cover dental care and vision care; others do not. Some states cover more mental health services than others.

Income limits for Medicaid vary widely by state. In some states, a single person earning $1,500 per month may not may have access to; in others, someone earning $2,500 per month may. Your state's Medicaid program sets its own threshold. You enroll through your state's Medicaid office, which may be called the Department of Social Services, Department of Human Services, or Department of Health and Human Services depending on where you live. You can find your state's office through the Centers for Medicare & Medicaid Services website at medicaid.gov.

Unlike Medicare, Medicaid has no yearly enrollment important date. You can explore at any time. However, some states have waiting lists for certain services, such as home care or supported employment programs for people with disabilities.

What Happens If You Have Both Medicare and Medicaid

If you are 65 or older and have a low income, you may be covered by both programs. Medicaid then becomes your "secondary payer," meaning Medicare pays first for covered services, and Medicaid covers costs Medicare does not pay (such as copayments, coinsurance, and deductibles). Medicaid may also cover services Medicare does not, such as long-term nursing home care or dental work.

To have both, you must meet the income and asset limits set by your state's Medicaid program. Some states have special programs for people who are dual may be able to access, such as Programs of All-Inclusive Care for the Elderly (PACE). These programs coordinate Medicare and Medicaid benefits and often provide additional services like adult day care or transportation.

If you are dual may be able to access, you do not need to do anything special. Both programs will coordinate automatically once you are enrolled in each one. However, you should tell both programs about any changes in your income, living situation, or health insurance, because changes can affect your coverage.

Key Differences in Coverage and Cost

Medicare Part B and Part D require monthly premiums (payments you make to stay enrolled). Most people pay the standard Part B premium of $164.90 per month in 2024, though higher-income people pay more. Part D premiums vary by plan and range from about $7 to $100 per month. Part A has no monthly premium if you worked and paid Medicare taxes for 10 years, but you pay a deductible when you use hospital services.

Medicaid has no monthly premium in most states. However, some states charge small copayments when you use services (typically $1 to $5 per visit). Medicaid covers services Medicare does not, such as nursing home care, personal care information at home, and transportation to medical appointments.

Medicare does not cover long-term nursing home care, dental work, vision care, hearing aids, or most prescription drugs without Part D. Medicaid covers these services in most states, though the scope varies. This is why dual-may be able to access people often rely on Medicaid to fill gaps in Medicare coverage.

How to Know Which Program You Might Use

If you are 65 or older, you will use Medicare. You have no choice — you must enroll or pay a penalty. If you are under 65 and have a low income, you may be covered by Medicaid. The income threshold depends on your state and family size.

If you are under 65 and do not have a low income, neither program covers you. You would need to purchase private health insurance through your employer, the health insurance marketplace (healthcare.gov), or directly from an insurance company.

If you are unsure whether you meet your state's Medicaid income limit, contact your state's Medicaid office directly. They can tell you the exact threshold for your household size and help you understand what services are covered in your state.

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 may have access to for both. Medicaid becomes your secondary payer and covers costs Medicare does not pay, such as copayments and deductibles. You must meet your state's Medicaid income and asset limits.

Do I have to pay a monthly premium for Medicaid?

Most states do not charge a monthly premium for Medicaid. Some states charge small copayments (usually $1 to $5) when you use services. Check with your state's Medicaid office for the exact costs in your area.

What if I miss the Medicare enrollment important date?

If you do not enroll in Medicare when you first become may be able to access, you will pay a penalty for each month you delay. The penalty is added to your Part B and Part D premiums for the rest of your life. You can still enroll during the general enrollment period (January 1 to March 31), but the penalty applies.

Does Medicaid cover nursing home care?

Yes, Medicaid covers long-term nursing home care in all states. Medicare covers only short-term skilled nursing care (up to 100 days) after a hospital stay. If you need long-term care, Medicaid is usually the program that pays.

How do I find out my state's Medicaid income limit?

Contact your state's Medicaid office directly or visit medicaid.gov and select your state. You can also call 211 (a free helpline) and ask for your state's Medicaid income limits and how the process works.