Difference Between Medicaid And Medicare

According to the U.S. Centers for Medicare & Medicaid Services (CMS), over 65 million people were enrolled in Medicare in 2023, while over 87 million individuals were covered under Medicaid by the end of the same year.

Both are government-run programs aimed at supporting healthcare access—but they’re not the same. So, what’s the difference between Medicaid and Medicare?

What Is Medicare?

Medicare is a federal health insurance program designed mainly for:

  • People aged 65 and older
  • Individuals under 65 with specific disabilities
  • People with End-Stage Renal Disease (permanent kidney failure)

➤ Key Medicare Facts:

  • Funded by the federal government
  • Managed by the Centers for Medicare & Medicaid Services (CMS)
  • Enrollment handled at the national level (Social Security Administration)

Parts of Medicare:

PartNameWhat It Covers
Part AHospital InsuranceInpatient care, hospital stays, nursing facilities
Part BMedical InsuranceDoctor visits, outpatient care, preventive services
Part CMedicare AdvantageCombines A & B; offered by private insurers
Part DPrescription Drug CoverageHelps cover cost of prescription meds

What Is Medicaid?

Medicaid is a joint federal and state program that helps with medical costs for low-income individuals and families.

➤ Key Medicaid Facts:

  • Eligibility and benefits vary state by state
  • It covers more services than Medicare in many states (especially long-term care)
  • Funded by both federal and state governments
  • States must meet federal guidelines but can tailor coverage

Who Does Medicaid Serve?

  • Low-income adults
  • Children (through CHIP in many cases)
  • Pregnant women
  • Elderly individuals with low income
  • People with disabilities

10 Key Differences Between Medicare and Medicaid

Let’s break this down into plain English:

FeatureMedicareMedicaid
Who Runs ItFederal GovernmentFederal + State
EligibilityBased on age/disabilityBased on income and need
Cost to YouMonthly premiums, copays, deductiblesLow or no cost depending on income
Covers Children?NoYes
Covers Long-Term Care?Very limitedYes, including nursing home care
Prescription Drugs?Part D (optional)Often included
Choice of Doctors?Any that accept MedicareOften limited to Medicaid providers
EnrollmentThrough Social Security or Medicare.govThrough your state’s Medicaid office
Dental and Vision?Limited coverageOften included for children and optional for adults
Dual Eligibility?N/AYes, you can get both Medicare and Medicaid

More Opportunities: How to Get Senior Food Allowance?

Eligibility Requirements

Medicare Eligibility in 2025:

  • 65 years or older (automatic enrollment in many cases)
  • OR under 65 and receiving SSDI (Social Security Disability Insurance) for at least 24 months
  • OR diagnosed with ALS or ESRD

Medicaid Eligibility in 2025:

Each state sets its own income limits. But as of 2025, most states follow these general rules:

  • Income must fall below 138% of the Federal Poverty Level (FPL)
    • For a single adult: Around $20,783/year
    • For a family of four: About $43,056/year
  • Assets and resources may be considered for elderly or disabled applicants

Check your state requirements here: https://www.healthcare.gov/medicaid-chip/eligibility

Cost Comparison: Medicaid vs. Medicare

Medicare Costs:

  • Part A: Usually free (if you worked 10+ years)
  • Part B: $174.70/month (standard premium in 2024)
  • Part D: Varies based on plan
  • Deductibles: $1,632 for Part A; $240/year for Part B
  • Copayments: $0–20% for most services

Medicaid Costs:

  • Usually free or very low cost
  • Some states charge small copayments, like $3–$10 per visit
  • No large deductibles or premiums for most enrollees

What’s Covered?

Medicare Covers:

  • Hospital stays
  • Doctor visits
  • Lab tests
  • Preventive services (vaccines, screenings)
  • Home health care
  • Short-term rehab

🔻 Does NOT usually cover:

  • Long-term care
  • Most dental, vision, or hearing
  • Custodial care

Medicaid Covers:

  • Everything Medicare covers plus:
    • Long-term care (nursing homes)
    • Dental and vision (especially for children)
    • Mental health and substance abuse treatment
    • Transportation to medical appointments
    • In-home support for disabled and elderly

Can You Have Both Medicaid and Medicare? (Dual Eligibility)

Yes, over 12 million Americans are dually eligible.

If you qualify for both programs:

  • Medicare pays first
  • Medicaid covers the leftover costs (copays, deductibles, premiums)
  • You may qualify for a Medicare Savings Program (MSP) or Extra Help with prescriptions

This combo provides nearly full coverage with little to no out-of-pocket costs.

Real-Life Scenarios

Scenario 1: Alice, 67, retired teacher

  • Gets Medicare automatically
  • Pays $174.70/month for Part B
  • Chooses Medicare Advantage to bundle dental and vision

Scenario 2: Mark, 45, unemployed and low-income

  • Doesn’t qualify for Medicare (not 65)
  • Applies for Medicaid through his state
  • Gets free care, including prescriptions and mental health services

Scenario 3: Sarah, 70, disabled and low-income

  • Has Medicare based on age
  • Applies for Medicaid due to low income
  • Gets help paying premiums and covers long-term care

Final Thought

Both Medicare and Medicaid play critical roles in the U.S. healthcare system. But they serve different people, have different rules, and offer different types of coverage.

Here’s a recap:

  • Medicare = Age/Disability-Based, Federal Program
  • Medicaid = Income-Based, Joint Federal-State Program
  • You can qualify for both and receive broader benefits

So whether you’re approaching retirement, helping a family member, or navigating your own healthcare journey—it’s crucial to understand these two programs inside and out.

FAQs

Can I lose Medicaid or Medicare?

Yes. If your income increases or your disability status changes, you may lose Medicaid. Medicare typically continues unless you cancel it.

Does Medicaid cover all the same things in every state?

No. States have flexibility. While they must meet federal minimums, many choose to expand services, especially for dental or mental health.

Is Medicare free?

Not entirely. While Part A is often free, Part B, D, and Medicare Advantage usually have monthly premiums and other costs.

Do I have to sign up for Medicare when I turn 65?

Yes, unless you’re already receiving Social Security. You should enroll during the 7-month Initial Enrollment Period to avoid penalties.

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