Medicare and Medicaid are separate federal programs with different purposes, funding, and rules
Medicare is a federal health insurance program for people aged 65 and older, regardless of income. It is also available to some younger people with disabilities or end-stage renal disease. Medicaid is a joint federal and state program that covers low-income individuals and families of any age. The two programs are funded differently, administered differently, and cover different things — the similarity in their names is the only thing they have in common.
The confusion is understandable because both are government health programs and both use the word "medical" in their names. But if you are enrolled in one, you are not automatically enrolled in the other, and the rules about who pays, what is covered, and how you stay covered are entirely separate.
Key Takeaways
- Medicare is based on age or disability status and is the same in every state; Medicaid is based on income and varies significantly by state.
- You pay Medicare payroll taxes during your working years to fund your own coverage later; Medicaid is funded by general tax revenue and is available immediately to those who meet income limits.
- Some people may have access to for both programs at the same time — this is called "dual may be able to access" — but enrollment in one does not enroll you in the other.
- Each program has its own application process, its own rules about what doctors and hospitals are in-network, and its own rules about copays and deductibles.
Who Medicare covers versus who Medicaid covers
Medicare covers people aged 65 and older, people under 65 with certain disabilities, and people with end-stage renal disease (ESRD). You become may be able to access for Medicare based on age or medical condition, not based on how much money you have. A millionaire and a person living in poverty can both have Medicare if they meet the age or disability requirement.
Medicaid covers low-income individuals and families. The income limit varies by state and by family size, and it also depends on which category you fall into — children, pregnant people, parents, elderly people, or people with disabilities all have different income thresholds in most states. In some states, Medicaid covers people earning up to 138% of the federal poverty line; in others, the limit is much lower. You must reapply for Medicaid periodically, usually once a year, to confirm you still meet the income requirement.
How the programs are funded and administered
Medicare is funded through payroll taxes that workers and employers pay during working years. When you turn 65, you become may be able to access to enroll, and the program is administered by the federal Centers for Medicare & Medicaid Services (CMS). The same Medicare rules apply in every state.
Medicaid is funded jointly by the federal government and individual states. Each state designs and runs its own Medicaid program within federal guidelines, which means coverage, income limits, and rules differ from state to state. A person who qualifies for Medicaid in one state might not may have access to in another state, and the services covered may be different. If you move to a different state, you may need to reapply for Medicaid under that state's rules.
What each program covers
Medicare has four parts: Part A covers hospital stays, skilled nursing, hospice, and some home health care; Part B covers doctor visits and outpatient services; Part D covers prescription drugs; and Part C (Medicare Advantage) is an alternative way to receive Parts A, B, and D through a private insurance company. Medicare does not cover dental, vision, or hearing aids in most cases, though some Medicare Advantage plans offer limited coverage.
Medicaid covers a broader range of services in most states, including doctor visits, hospital care, prescription drugs, dental care, vision care, and long-term care services like nursing home and home and community-based services. However, what Medicaid covers varies by state. Some states cover dental care for adults; others do not. Some states cover vision care; others limit it. You need to check your specific state's Medicaid program to know what is covered.
Dual may be able to access: when someone has both Medicare and Medicaid
Some people may have access to for both programs at the same time. This usually happens when someone is aged 65 or older and also has income low enough to may have access to for Medicaid, or when someone under 65 qualifies for Medicare due to disability and also meets the income requirement for Medicaid. People who have both are called dual may be able to access.
If you are dual may be able to access, Medicare is your primary insurance, meaning it pays first. Medicaid pays second, covering some of the costs that Medicare does not cover, like copays and deductibles. You are enrolled in both programs separately — being approved for one does not automatically enroll you in the other. You must apply to each program independently, and you will receive separate insurance cards and bills from each program.
How to apply for each program
To apply for Medicare, you contact Social Security or visit Medicare.gov. You become may be able to access at 65, and you should enroll during your initial enrollment period (usually the three months before, the month of, and the three months after your 65th birthday). If you miss this window, you may pay a penalty for late enrollment.
To apply for Medicaid, you contact your state's Medicaid office or your state's health insurance marketplace. The application process, required documents, and processing time vary by state. Some states allow online applications; others require you to apply in person or by mail. You can also contact 211 (by phone or online at 211.org) to find your state's Medicaid office and learn about the application process in your area.
Why the names are confusing
Both programs have "medical" in their names because they both provide medical coverage. Medicare was created in 1965 as a health insurance program for elderly people. Medicaid was created the same year as a health insurance program for low-income people. The names were meant to be straightforward, but the similarity has caused confusion for decades.
The best way to remember the difference: Medicare is based on age or disability; Medicaid is based on income. If you are over 65 or have a may have access to disability, you are looking at Medicare. If you have a low income, you are looking at Medicaid. The two programs operate independently, and the only connection between them is that some people may have access to for both.
Frequently Asked Questions
If I have Medicare, do I automatically have Medicaid?
No. Medicare and Medicaid are separate programs with separate enrollment processes. You must apply to each one independently. Some people may have access to for both, but enrollment in one does not enroll you in the other.
Can I lose Medicare if my income changes?
No. Medicare is not based on income. Once you are enrolled in Medicare at 65 or due to disability, your coverage continues regardless of how much money you earn or have. Medicaid, however, is income-based and can be lost if your income rises above your state's limit.
Which program should I choose if I may have access to for both?
You do not choose — if you may have access to for both, you are enrolled in both. Medicare is your primary insurance and pays first. Medicaid pays second, covering some costs Medicare does not cover. Having both is usually better than having either one alone.
Does Medicare cover the same things as Medicaid?
No. Medicare covers hospital care, doctor visits, and prescription drugs, but not dental or vision in most cases. Medicaid covers a broader range of services in most states, including dental, vision, and long-term care, though what is covered varies by state.
What if I move to a different state?
Your Medicare coverage continues in every state — it is the same everywhere. If you have Medicaid, you will need to apply for Medicaid in your new state, because each state runs its own program with different rules and income limits.