The Core Difference: Who Pays and Who Gets Covered

Medicare is a federal insurance program you pay into through payroll taxes during your working years. You become covered at 65, regardless of income. Medicaid is a joint federal and state program that covers people with low income, regardless of age. The programs are separate, funded differently, and cover different groups of people.

Medicare is the same nationwide. Medicaid rules change by state — what covers you in one state may not in another. This distinction matters because it determines which program you turn to, what paperwork you need, and what your out-of-pocket costs will be.

Some people have both programs at the same time. This happens when someone turns 65 and qualifies for Medicare but also has income low enough for Medicaid. The combination is sometimes called "dual coverage."

Key Takeaways

  • Medicare covers people 65 and older, plus some younger people with disabilities or end-stage renal disease, and is funded through payroll taxes.
  • Medicaid covers people with low income of any age and is jointly funded by federal and state governments, with rules that vary by state.
  • Medicare has the same coverage rules everywhere; Medicaid coverage and income limits differ depending on which state you live in.
  • Medicare requires you to pay premiums, deductibles, and copayments; Medicaid typically has lower or no out-of-pocket costs for people who meet income requirements.
  • You can have both programs at the same time if you are 65 or older and have low enough income to meet your state's Medicaid rules.

Who Medicare Covers

You become covered by Medicare automatically at 65 if you or your spouse paid Medicare taxes for at least 10 years while working. You do not have to be retired — the program covers you whether you still work or not. If you did not work long enough to earn coverage yourself, you may be covered through a spouse's work history.

Medicare also covers people under 65 in specific situations: if you have been receiving Social Security disability benefits for 24 months, if you have end-stage renal disease (permanent kidney failure), or if you have amyotrophic lateral sclerosis (ALS). These younger beneficiaries follow the same coverage rules as people 65 and older.

Your income does not matter for Medicare. A person earning $200,000 a year and a person earning $20,000 a year both pay the same Medicare taxes and both become covered at 65.

Who Medicaid Covers

Medicaid covers people with low income. The income limit varies by state and by family size. In some states, a single person earning $1,500 a month might may have access to; in others, the limit is higher or lower. Your state's Medicaid office publishes its current income limits, and you can check yours by contacting them directly or visiting your state health department website.

Medicaid also covers people in specific groups: children, pregnant people, parents of dependent children, people over 65, and people with disabilities. Some states cover more groups than others. A person who does not fit into any covered group may not be covered by Medicaid in their state, even if their income is low.

Age does not disqualify you from Medicaid. A 30-year-old and a 75-year-old can both be covered if their income is low enough and they meet their state's other rules.

How You Pay: Premiums, Deductibles, and Copayments

Medicare requires you to pay a monthly premium for Part B (doctor visits and outpatient care), which is currently around $165 per month for most people, though the exact amount changes yearly. You also pay a deductible before Medicare starts paying — for Part B, this is $240 per year. After you meet the deductible, you typically pay 20 percent of the cost of covered services.

Medicaid typically has no monthly premium or a very low one. Many Medicaid programs have no deductible. Copayments are usually small — often $1 to $5 per visit — or absent entirely. Some states charge slightly more for people with higher incomes within the Medicaid range, but costs stay far below Medicare's structure.

If you have both Medicare and Medicaid, Medicare pays first, and Medicaid covers some of what Medicare does not pay. This can significantly lower your out-of-pocket costs.

What Each Program Covers

Medicare covers hospital stays (Part A), doctor visits and outpatient care (Part B), prescription drugs (Part D), and optional supplemental coverage (Medigap or Medicare Advantage). It does not cover dental, vision, or hearing aids unless you choose a Medicare Advantage plan that includes them. Long-term care in a nursing home is covered only for the first 100 days after a hospital stay, and only under specific conditions.

Medicaid covers doctor visits, hospital stays, emergency care, and prescription drugs. It also covers services Medicare does not: dental care, vision care, hearing aids, and long-term nursing home care if you meet the program's financial rules. Medicaid coverage varies by state — some states cover more services than others.

Both programs cover preventive care like screenings and vaccinations at no cost to you. Both cover emergency room visits. The main difference is that Medicaid covers long-term care and some services Medicare does not, while Medicare is more comprehensive for acute medical care.

How to Understand Your State's Medicaid Rules

Because Medicaid is run by states, you must check your own state's rules rather than assuming they match another state's. Your state Medicaid office has a website listing income limits, covered groups, and what services are covered. You can also call your state health department or visit 211.org to find your local Medicaid office phone number.

Income limits are usually published as a percentage of the federal poverty level. If your state's limit is 138 percent of the federal poverty level, and the federal poverty level for a single person is $14,580, then your state's limit would be roughly $20,120 per year. Your state office can tell you the exact number for your household size.

Some states have expanded Medicaid to cover more people; others have not. This means a person with the same income might be covered in one state and not in another. Checking your specific state is the only way to know for certain.

When You Might Have Both Programs

If you turn 65 and your income is low enough to meet your state's Medicaid rules, you can have both Medicare and Medicaid at the same time. This is common and is called dual coverage. When you have both, Medicare is your primary insurance and pays first; Medicaid covers gaps in Medicare coverage.

Having both programs means lower out-of-pocket costs. Medicare's deductibles and copayments are reduced or eliminated by Medicaid. If you are 65 or older and have low income, it is worth checking whether your state's Medicaid program covers you, because the combination can save you hundreds of dollars per year.

Some people become may be able to access for Medicare before 65 due to disability or kidney disease. If their income is also low, they can have both programs during those years 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 meet your state's Medicaid rules, you can be covered by both programs. Medicare is your primary insurance, and Medicaid helps cover costs Medicare does not pay. Contact your state Medicaid office to check whether you meet the income and other requirements.

What is the income limit for Medicaid?

The income limit varies by state and by family size. Some states set the limit at 138 percent of the federal poverty level; others use different percentages. Your state Medicaid office publishes its exact limits. You can find your state office by calling 211 or visiting your state health department website.

Does Medicare cover dental and vision care?

Original Medicare does not cover routine dental, vision, or hearing care. Some Medicare Advantage plans include these services, but you pay a separate premium for them. Medicaid covers dental and vision in most states, though coverage varies by state.

Do I have to pay for Medicare?

Yes. You pay a monthly premium for Part B (currently around $165 per month for most people), a yearly deductible ($240 for Part B), and copayments for services. If you also have Medicaid, Medicaid can help cover these costs. The exact amounts change yearly.

What happens to my Medicaid if I turn 65?

You do not automatically lose Medicaid when you turn 65. If your income is still low enough to meet your state's Medicaid rules, you remain covered. You will also become covered by Medicare at 65. You can have both programs at the same time.