Medicare vs. Medicaid: What’s the Difference?

checkmark Fact checked Reviewed by: Leron Moore, Medicare consultant - Updated: Sep 14, 2021

 

Understand the differences between Medicare and Medicaid – and find out if you can qualify for both.

What you should know

  • 1 Medicare and Medicaid are both government programs to help Americans afford health care.
  • 2 Medicaid is available if you meet your state’s income eligibility and other standards. The federal government and each state fund it.
  • 3 Medicare is health care coverage available if you’re at least 65 or have a qualifying disability.
  • 4 It is possible to be eligible for both Medicaid and Medicare at the same time.

It’s easy to get confused between Medicare and Medicaid, but they are very different programs. Though both are government-run health care programs, the similarities end there. Medicaid is available if you have low income, while Medicare eligibility kicks in when you turn 65 or have a qualifying disability.

If you meet income eligibility, Medicaid can be an essential resource for covering healthcare expenses that Medicare does not. But not everyone can qualify for Medicaid, so you can enroll in Medicare when you reach retirement age.

Both programs are designed to offset the costs of health care services. However, Medicaid offers additional coverages that Medicare does not. If you’re dual eligible, you can qualify for Medicaid and Medicare and get coverage from both.

Learn more about the differences between Medicaid and Medicare.

Program Medicare Medicaid
Who qualifies Adults 65 and up or younger people with qualifying disabilities People with low income that meet state eligibility
What’s covered Primary coverageHospital and medical insuranceOptions for adding prescription drug and other coverage Secondary coverage if you have MedicareMajor medical insuranceSome drugs Additional services such as nursing home care, personal care, dental, vision, and hearing
What it costs Part A is free; premiums are required for Part B, C, and D. Free or low cost

Is Medicare the same thing as Medicaid?

Although they sound similar, Medicare and Medicaid are not the same. The only similarity is that both government health care programs help cover healthcare costs for Americans.

“Medicaid is designed for people that fall into a certain income bracket while Medicare is for people over the age of 65 or for those that have been on disability for two years,” explains Grant Dodge, a broker at Health Benefits Associates Inc., in Reno, Nevada.

Medicaid does not have an age requirement, so adults of all ages and dependent children can enroll. In 2021, there were 73.8 million people covered with Medicaid. Medicaid plans are administered by the states but funded jointly by the state and federal government.

Medicare is a federal program run by the Social Security Administration. It has an age requirement (65) unless you’ve been on disability for 24 months or have specific medical conditions. “Once you have both parts of Medicare from the federal government (Part A and Part B), you can sign up for additional coverage with private insurance carriers to fill in the gaps of Medicare,” explains Dodge.

Which is better, Medicare or Medicaid?

Both programs are crucial in helping Americans afford health care expenses.

Medicaid is based on financial need and is more widely available for people of all ages. It also provides more complete coverage than Medicare, as it pays for some drugs and additional services such as nursing home care, personal care, dental, vision, and hearing.

However, if you don’t meet your state’s Medicaid eligibility, Medicare is a significant government benefit if you qualify.

Can you have both Medicare and Medicaid?

In some cases, you can be eligible for both Medicaid and Medicare – it’s referred to as “dual eligible.” With both Medicare and Medicaid coverage, the programs will cover practically all of your health expenses.

For dual eligibles, Medicare is the primary coverage and pays first; Medicaid pays second for anything that isn’t covered. Medicare can cover your Part D prescription drugs, while Medicaid may cover some drugs and other care not covered by Medicare.

Some states have a Medicare-Medicaid Plan (MMP) which coordinates your Medicare and Medicaid benefits. You may qualify for a Dual Eligible Special Needs Plan (D-SNP) with some state-covered costs depending on your eligibility.

Just because you are eligible for one does not mean you qualify for the other, however. “Medicare status is determined by age or disability while Medicaid status is determined by income,” says Dodge. “It is important to check both since you may qualify for better benefits and reduced out-of-pocket expenses if you do.”

Is Medicaid free?

It’s free to sign up for Medicaid and coverage is typically free or low-cost. If you have both Medicare and Medicaid, it is possible to find a plan through a private insurance carrier that has no premiums and little to no out-of-pocket expenses at the doctor, says Dodge. “These plans also typically cover extra services like dental, vision, and hearing aids,” he adds.

This expert was consulted for insight into understanding Medicaid vs. Medicare:

Grant Dodge, broker at Health Benefits Associates, Inc., Reno, Nevada

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Contributing Expert:

Leron Moore, Medicare consultant

Leron Moore has guided Medicare beneficiaries and their families as a Medicare professional for nearly 15 years. First as a Medicare provider enrollment specialist, and now a Medicare account executive, Moore works directly with Medicare beneficiaries to ensure they understand Medicare and Medicare Advantage Plans.