Medicare is for seniors; Medicaid is for people with low income
Medicare is a federal health insurance program you become may be able to access for at age 65, regardless of income. You pay into it through payroll taxes during your working years. Medicaid is a joint federal-state program that covers people with low income and limited assets — it has no age requirement, though many seniors use it.
The two programs work differently, cover different services, and have different rules depending on where you live. Most seniors use Medicare as their primary insurance. Some seniors may have access to for both programs at the same time — this is called being "dual may be able to access" — and the programs coordinate to cover costs. Understanding which program covers what matters because it determines what you pay out of pocket, which doctors you can see, and what services are covered. The choice is not usually yours to make: your age and income determine which programs you can use.
Key Takeaways
- Medicare starts at age 65 and is based on your work history, not your income or assets.
- Medicaid is based on income and assets and varies by state — some states cover seniors with higher incomes than others.
- Seniors can be on both Medicare and Medicaid at the same time, and Medicaid can pay some of Medicare's costs.
- Medicare covers hospital care, doctor visits, and prescription drugs; Medicaid covers long-term care and services Medicare does not.
- You must sign up for Medicare at 65 or face penalties; Medicaid enrollment is continuous in most states.
How Medicare works for seniors at 65
Medicare has four parts. Part A covers hospital stays, skilled nursing facility care, and hospice. Part B covers doctor visits, outpatient care, and preventive services. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative to Parts A and B offered by private insurers — it usually includes drug coverage and may cover services Original Medicare does not.
You pay a monthly premium for Part B and Part D. Part A is free if you or your spouse paid Medicare taxes for at least 10 years. You also pay deductibles and copayments when you use services. The amounts change each year. You must sign up for Medicare during your initial enrollment period, which begins three months before you turn 65 and ends three months after. If you miss this window and do not have other may have access to coverage, you pay a permanent penalty on your Part B and Part D premiums for as long as you have Medicare.
How Medicaid works for seniors with low income
Medicaid covers seniors whose income and assets fall below limits set by each state. The income limit varies widely — some states cover seniors earning up to 100% of the federal poverty level; others cover up to 300% or more. Your home, one car, and certain savings are not counted as assets in most states, but the exact rules differ.
Medicaid covers services Medicare does not: long-term care in a nursing home, personal care assistance, dental care, and vision care. If you are on both Medicare and Medicaid, Medicaid pays some of Medicare's premiums, deductibles, and copayments — this is called "cost-sharing." Medicaid becomes your secondary payer. You can apply for Medicaid at any time. There is no enrollment period and no penalty for applying late. Each state runs its own Medicaid program, so rules about income, assets, and covered services differ by location. You apply through your state's Medicaid office or online portal.
When seniors may have access to for both programs
A senior who is 65 or older, has Medicare, and has income and assets below the Medicaid limit in their state is "dual may be able to access." This means both programs cover you, and they work together to pay your medical bills. Medicare pays first for services it covers. Medicaid pays second, covering costs Medicare does not pay — such as the Part B premium, deductibles, and copayments. Medicaid also covers services Medicare does not, like nursing home care and personal care assistance.
Being dual may be able to access is common among seniors with limited income. It usually means lower out-of-pocket costs than Medicare alone, because Medicaid fills in gaps. However, you must meet your state's Medicaid income and asset limits, which are stricter than Medicare's. Some states have special programs for dual-may be able to access seniors that coordinate care and may offer additional services.
Income and asset limits vary by state
Medicaid income limits for seniors range from about $900 per month to over $2,000 per month, depending on the state. Some states use "medically needy" rules that allow higher income if you have high medical expenses. Asset limits also vary — most states allow $2,000 in countable assets for a single person, but some allow more.
Your home does not count toward the asset limit in any state. One vehicle does not count. Retirement accounts like IRAs and 401(k)s are usually not counted if you are already retired. Life insurance policies under a certain value are not counted. Because rules are state-specific, you must check your state's Medicaid office website or call to learn the exact limits where you live. The same income that qualifies you in one state may not may have access to you in another.
Services covered by Medicare versus Medicaid
| Service | Medicare | Medicaid |
|---|---|---|
| Hospital stays | Yes (Part A) | Yes |
| Doctor visits | Yes (Part B) | Yes |
| Prescription drugs | Yes (Part D) | Yes (varies by state) |
| Nursing home care | Limited (up to 100 days) | Yes (long-term) |
| Personal care assistance | No | Yes |
| Dental care | No | Limited (varies by state) |
| Vision care | Limited | Limited (varies by state) |
| Hearing aids | No | Some states |
Medicare covers acute medical care — treatment for illness and injury. Medicaid covers both acute care and long-term services. If you need a nursing home for more than 100 days, Medicare stops paying and you must use Medicaid, private pay, or other sources. Medicaid covers nursing home care indefinitely if you meet income and asset limits.
The difference matters most for long-term care. If you develop dementia or a chronic condition that requires ongoing assistance, Medicare will not pay for a nursing home beyond 100 days. Medicaid will, but only if your income and assets are low enough. Planning ahead — understanding these limits and what they mean for your savings — can affect your choices later.
How to find out which program you may have access to for
To learn whether you may have access to for Medicare, check your age and work history. If you are 65 or older and you or your spouse paid Medicare taxes for at least 10 years, you may have access to for Medicare Part A. You can verify this by creating an account at ssa.gov or calling Social Security at 1-800-772-1213.
To learn whether you may have access to for Medicaid, contact your state's Medicaid office. You can find the office by searching "[your state] Medicaid" online or calling 211, which connects you to local health and human services. Have your income and asset information ready. Many states let you start the process online. If you turn 65 soon, sign up for Medicare during your initial enrollment period even if you think you might may have access to for Medicaid. You can have both. Waiting to sign up for Medicare can cost you in penalties later.
Frequently Asked Questions
Do I have to choose between Medicare and Medicaid?
No. If you may have access to for both, you can have both at the same time. Medicare is your primary insurance and Medicaid is secondary. Medicaid helps pay costs Medicare does not cover. You do not choose one or the other — you enroll in both separately.
What happens to my Medicaid if I turn 65 and get Medicare?
Your Medicaid does not end automatically when you turn 65. If you still meet your state's income and asset limits, you stay on Medicaid. Medicaid will coordinate with your new Medicare coverage. Contact your state Medicaid office to make sure your case is updated.
Can I lose Medicaid if my income goes up?
Yes. If your income rises above your state's Medicaid limit, you may lose Medicaid coverage. Some states have "spend-down" rules that let you reduce your income by paying medical expenses. Report income changes to your state Medicaid office right away to avoid overpayments or sudden loss of coverage.
Does Medicare cover nursing home care?
Medicare covers up to 100 days in a skilled nursing facility after a hospital stay of at least three days, and only if you need skilled care. After 100 days, you pay out of pocket or use Medicaid if you may have access to. Medicaid covers long-term nursing home care with no time limit if you meet income and asset rules.
What if I cannot afford Medicare premiums?
If you may have access to for Medicaid, Medicaid can pay your Medicare Part B and Part D premiums. Some people also may have access to for Medicare Savings Programs, which are state-run programs that help pay premiums and cost-sharing. Contact your state Medicaid office to learn what programs are available where you live.