What Is the Difference Between Medicare and Medicaid?

01.13.2026 | Category: Medicare

Estimated Read Time: ~8.5 minutes

Summary: Medicare is a federal health insurance program primarily for people aged 65 and older or those with certain disabilities, regardless of income. Medicaid, on the other hand, is a state and federal program that provides health coverage for people with low income, including some seniors, children and people with disabilities.

Navigating government health coverage can be confusing, especially when the names sound so similar. Medicare and Medicaid are two major U.S. government programs that offer essential benefits, but they serve different people and purposes.

Whether you’re approaching retirement, living on a limited income or helping a loved one make healthcare decisions, understanding the key differences between these programs can help you choose the appropriate coverage.

What is Medicare?

Medicare is a federal health insurance program for individuals who meet specific age or medical requirements, regardless of income. Coverage is not determined by financial circumstances and works similarly to traditional insurance. Medicare taxes are deducted from your paycheck during your working years. Once you reach the standard eligibility for Medicare at the age of 65, you qualify for its benefits because of those tax contributions.

Though Medicare is designed primarily for older adults, it also covers certain younger individuals based on specific eligibility criteria.

You may be eligible if you:

Are 65 or older
Are under 65 with a qualifying disability
Have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS)

In addition to one of these criteria, you must also be a U.S. citizen or legal resident for at least 5 years.

The federal agency, Centers for Medicare & Medicaid Services (CMS), oversees Medicare. As a result, your benefits remain consistent nationwide, no matter which state you’re in.

Medicare is divided into four parts:

Part A (hospital insurance): Covers inpatient hospital care, skilled nursing facility care, hospice and some home health care
Part B (medical insurance): Covers outpatient care, doctor visits, preventive services and some home health care
Part C (Medicare Advantage):
 Offered by private companies, these plans bundle Parts A and B, often with additional benefits like dental, vision and prescription drug coverage
Part D (prescription drug coverage): Helps pay for prescription medications

There are Medicare supplement plans that work alongside Original Medicare (Parts A and B, as well as Part D), but cannot be used in conjunction with Medicare Advantage. These Medicare supplement plans can help reduce out-of-pocket costs.

You can check out the Breaking Down the Difference Medicare Parts guide from Mutual of Omaha, which goes into greater detail of each of the Medicare parts.

What is Medicaid?

Medicaid, jointly administered by the federal and state governments, provides health coverage to individuals and families of all ages with limited income and resources. Medicaid often serves as a crucial financial safety net for those who might not qualify for other health coverage options.

Eligibility rules vary by state and some states offer expanded Medicaid coverage based on income alone, regardless of age or disability status.¹ You may be eligible for Medicaid if you meet your state’s income requirements and fall into at least one of the following categories:

You have a disability
You are pregnant
You are a child
You are a senior

Additionally, if you do meet one of the criteria above, you must also be a U.S. citizen or qualified legal resident and meet your state’s residency rules.

Since the Affordable Care Act took effect in 2014, many states have expanded Medicaid so more adults with lower incomes can get health coverage. If your state expanded Medicaid, you may qualify based on your income, typically if it’s below 138% of the federal poverty level.²

Medicare vs. Medicaid: Comparison

Feature	Medicare	Medicaid
Who is eligible?	Age 65+, certain disabilities, ESRD, ALS	Low-income individuals/families, people with disabilities, children and pregnant women
Who runs it?	Federal government	Federal and state governments
Coverage	Hospital, medical, prescription drugs, limited long-term care	Comprehensive medical, long-term care, dental, vision, hearing
Costs	Premiums, deductibles, coinsurance, copays	Usually low or no cost; small co-pays in some states
Uniformity	Same in all states	Varies by state

What does Medicare cost?

Most people do not pay a premium for Part A if they or their spouse paid Medicare taxes for at least 10 years. However, Part A does include an annual deductible as well as coinsurance for certain services.
Part B has a monthly premium, annual deductible and coinsurance.
Part C and D costs depend on the plan you choose. For example:
- Medicare Part C (Advantage Plans)
  - Combines hospital, medical, and often drug coverage
  - Costs vary: may include a premium, copays, deductible, and an out-of-pocket max
- Medicare Part D (Drug Coverage)
  - Covers prescription drugs
  - Costs may include a premium, deductible (up to $590 in 2025), and copays or coinsurance

What does Medicaid cost?

Costs vary by state, but Medicaid is generally free or low-cost, with minimal or no premiums, deductibles or copays for most services.
Some enrollees may have small copayments for certain services like prescriptions or non-emergency ER visits.
Long-term care services (like nursing home care) may have additional cost-sharing or estate recovery rules, depending on the state.

Who is eligible for both Medicare and Medicaid?

Some individuals qualify for both Medicare and Medicaid, a term known as “dual eligibility.” These individuals typically meet the criteria for Medicare based on age or disability and Medicaid based on income and assets.

Individuals who qualify for dual eligibility are:

Older adults (65+) or people with disabilities who meet state-specific income and asset limits.
Individuals receiving Supplemental Security Income (SSI) often qualify for full Medicaid benefits alongside Medicare.

Dual-eligible beneficiaries may receive help with Medicare premiums, deductibles and copayments through Medicaid.

How to apply for Medicare and Medicaid

Another key difference between Medicare and Medicaid is the application process.

Applying for Medicare

Getting Medicare coverage depends on whether you’re already receiving Social Security benefits and requires attention to specific enrollment timelines.

Automatic enrollment: If you’re receiving Social Security benefits, you’ll be automatically enrolled in Medicare Parts A and B when you turn 65.³
Manual enrollment: If not, you can apply online at the Social Security website, by phone or at your local Social Security office.⁴

Your Initial Enrollment Period starts 3 months before you turn 65 and ends 3 months after your birthday month.

Applying for Medicaid

Medicaid applications are handled at the state level, with each state managing its own process and requirements.

State-specific application: Apply through your state Medicaid office or online at your state’s Medicaid website.⁵
Application methods: Apply online, by mail or in person at a local Medicaid office.
Documents needed: Proof of income, citizenship/legal status, residency and sometimes medical records.

Common misconceptions about Medicare and Medicaid

Many people hold inaccurate beliefs about these healthcare programs that can lead to missed opportunities or costly mistakes.

Myth #1: You can enroll in Medicare or Medicaid at any time.

Reality: Both programs have specific enrollment periods and requirements.

Medicare: You typically must enroll during a designated enrollment period, such as when you turn 65 or lose other coverage, or you may face late penalties.
Medicaid: You can apply at any time of year, but approval depends on your income, household size and other eligibility factors set by your state.

Myth #2: Medicare pays for everything.

Reality: Medicare covers many healthcare services, but not everything, and you may still have out-of-pocket costs. For example:

Original Medicare generally pays 80% of the approved amount for many covered services, leaving the remaining 20% for you to pay (unless you have Medicare supplement coverage).
It generally does not cover long-term care, dental care, vision or hearing.

Myth #3: You have to go broke to get Medicaid for long-term care.

Reality: There may be ways to qualify without exhausting all your savings.

Certain programs and planning strategies can help protect some assets while still meeting Medicaid eligibility requirements. An elder law attorney can help you navigate the options.

Myth #4: You can’t have both Medicare and Medicaid.

Reality: You may qualify for both Medicare and Medicaid.
If you qualify for both, you’re “dual eligible” and it can provide extra help for covering costs.

Learn more about your coverage options

Choosing the right health coverage can feel overwhelming, but a few simple steps can help you find the best fit for your needs.

- Review your eligibility: Use tools on Medicare.gov and your state Medicaid site to check if you qualify.⁵
- Compare benefits: Check what services are included in each program to make sure your health needs are fully covered.

Review supplemental plans: If you have Medicare, evaluate a Medicare supplement plan for extra coverage. However, if you have both Medicare and Medicaid, a supplemental plan is usually unnecessary because Medicaid acts as your secondary coverage.

Ask for help: Reach out to your local State Health Insurance Assistance Program (SHIP) for personalized guidance. Even if you’re not dual-eligible, there may be ways to help with your Medicare out-of-pocket costs.

FAQs about Medicare vs. Medicaid

Q1: What are the main differences between Medicare and Medicaid?

Medicare is a federal health insurance program for people 65+ and those with certain disabilities, regardless of income.

Medicaid is a joint federal-state program for people with limited income and resources, available to people of all ages. Medicare has standardized benefits nationwide, while Medicaid benefits and eligibility vary by state.

Q2: Can I have Medicare without Medicaid?

Yes. Many people have Medicare only. You may qualify for Medicaid in addition to Medicare if your income and assets are low enough.⁶

Q3: Will Medicaid pay for my Medicare Part B Premium?

If you qualify for both Medicare and Medicaid, Medicaid may pay your Medicare Part B premium through a Medicare Savings Program (MSP), such as the Qualified Medicare Beneficiary (QMB) program.⁷ Eligibility depends on your income and assets, and rules vary by state.

Q4: If I have Medicaid, do I need Medicare Part D?

If you qualify for both Medicare and Medicaid, you are automatically enrolled in the Extra Help program, which helps pay for Medicare Part D prescription drug costs. Medicaid does not provide separate drug coverage for dual-eligible individuals, so Part D serves as your prescription coverage.

Q5: Is Medicaid or Medicare for seniors?

Medicare is designed for seniors (65+) and some younger people with disabilities. Medicaid is for people of all ages who meet income and other eligibility requirements. Only 17% of Medicare beneficiaries also have Medicaid;⁸ so, a small percentage of seniors qualify for both.

Sources

¹ Medicaid.gov. Web page: Resources for States, Retrieved July 30, 2025, from www.medicaid.gov/resources-for-states

² Healthcare.gov. Web page: Medicaid & CHIP, Retrieved August 28, 2025 from www.healthcare.gov/medicaid-chip/medicaid-expansion-and-you/

³ HHS.gov. Web page: Medicare Enrollment. Retrieved July 1, 2025, from www.hhs.gov/answers/medicare-and-medicaid/how-do-i-enroll-in-medicare/index.html

⁴ SSA.gov. Web page: Sign-up for Medicare. Retrieved July 1, 2025, from www.ssa.gov/medicare/sign-up

⁵ Medicaid.gov. Web page: Help on Medicaid/CHIP. Retrieved July 1, 2025, from www.medicaid.gov/about-us/where-can-people-get-help-medicaid-chip

⁶ Medicare.gov. Web page: A Quick Guide to Medicare and Medicaid. Retrieved June 19, 2025, from www.medicare.gov/publications/12207-a-quick-guide-medicare-medicaid.pdf

⁷ MedicalPlanningAssistance.org. Web page: Dual Eligibility for Medicare and Medicaid: Requirements and Benefits for Long Term Care. Retrieved June 19, 2025, from
www.medicaidplanningassistance.org/dual-eligibility-medicare-medicaid

⁸ KFF.org. Web page: A Profile of Medicare-Medicaid Enrollees (Dual Eligibles). Retrieved October 3, 2025, from www.kff.org/medicare/a-profile-of-medicare-medicaid-enrollees-dual-eligibles/

Item #644325