Medicare and Medicaid are separate federal programs with different purposes, funding, and rules

Medicare is a federal health insurance program for people age 65 and older, regardless of income. It is also available to some younger people with disabilities or end-stage renal disease. You pay into Medicare through payroll taxes during your working years, and it functions like an earned benefit.

Medicaid is a joint federal and state program that covers low-income individuals and families of any age. Each state runs its own Medicaid program within federal guidelines, so rules and income limits vary by state. Medicaid is means-tested, meaning your income and assets determine whether you may have access to.

The two programs do not replace each other. Some people have both — this is called "dual coverage" — and the programs coordinate to pay medical bills. But they are funded differently, administered differently, and cover different groups of people.

Key Takeaways

  • Medicare is for people 65 and older or those with certain disabilities; Medicaid is for low-income individuals and families of any age.
  • Medicare is federally funded through payroll taxes; Medicaid is jointly funded by federal and state governments and varies by state.
  • You do not choose between them — may be able to access is determined by age, disability status, or income, not by preference.
  • Some people may have access to for both programs at the same time, and they work together to cover medical costs.
  • Medicaid covers more services than Medicare in most states, including dental, vision, and long-term care, but coverage rules differ by state.

Who Medicare covers versus who Medicaid covers

Medicare covers nearly all Americans age 65 and older, plus some people under 65 who have been receiving Social Security Disability Insurance (SSDI) for at least two years, and people of any age with end-stage renal disease or ALS. You do not need to be low-income to receive Medicare; it is available to anyone who meets the age or disability requirement.

Medicaid covers low-income individuals and families. Income limits vary by state and family size. In most states, a single adult with income below 138% of the federal poverty level may be covered, though some states have lower thresholds. Medicaid also covers pregnant people, children, parents, and elderly or disabled individuals in most states, but the exact rules depend on where you live.

A person can have both programs. For example, a 68-year-old with low income would have Medicare (because of age) and may also have Medicaid (because of income). The two programs coordinate payment, with Medicare typically paying first and Medicaid filling gaps.

How funding and administration differ

Medicare is funded entirely by the federal government through payroll taxes (the Medicare tax on your paychecks), general federal revenue, and premiums paid by beneficiaries. The Centers for Medicare & Medicaid Services (CMS), a federal agency, runs Medicare the same way in all 50 states. Rules, coverage, and costs are uniform nationwide.

Medicaid is funded by both the federal government and individual states, with the federal government covering a percentage that varies by state wealth. Each state designs and runs its own Medicaid program within federal guidelines. This means income limits, covered services, and payment rates to doctors differ significantly from state to state. A service covered in one state may not be covered in another.

Because of this structure, the process for understanding your Medicaid options requires knowing your state's specific rules. Your state Medicaid office administers the program, not a federal office.

What services each program covers

Medicare has four parts: Part A (hospital stays), Part B (doctor visits and outpatient care), Part D (prescription drugs), and Part C (Medicare Advantage plans that bundle A, B, and D). Medicare does not cover dental, vision, hearing aids, or long-term nursing home care in most cases. You may purchase supplemental coverage (called Medigap) to fill gaps.

Medicaid covers a broader range of services in most states, including doctor visits, hospital care, prescription drugs, dental, vision, hearing aids, and long-term care in nursing homes or at home. However, the specific services covered and the rules for accessing them vary by state. Some states cover more mental health services, therapy, or transportation to medical appointments than others.

If you have both Medicare and Medicaid, Medicare pays first for services both programs cover, and Medicaid may pay the remaining cost-sharing (copayments, coinsurance, deductibles). This coordination reduces your out-of-pocket costs.

Costs and premiums for each program

Most people do not pay a premium for Medicare Part A if they or their spouse paid Medicare taxes for at least 10 years. Part B has a monthly premium (in 2024, the standard premium is $164.90 per month, though it varies by income). Part D (prescription drug coverage) has a monthly premium that varies by plan. You also pay deductibles, copayments, and coinsurance when you use services.

Medicaid has no monthly premium in any state. However, some states charge small copayments when you visit a doctor or fill a prescription, though these are typically lower than Medicare's costs. The exact copayments depend on your state and the service.

If you have both programs, Medicaid usually covers your Medicare premiums and cost-sharing, which significantly reduces your total out-of-pocket expenses. This is one reason dual coverage is valuable for low-income seniors.

How to find out which program you may be covered by

If you are 65 or older, you are automatically enrolled in Medicare Part A when you turn 65, as long as you or your spouse paid Medicare taxes. You receive a Medicare card in the mail. If you are younger but have a disability or end-stage renal disease, you can contact Social Security to learn whether you may have access to.

To learn about Medicaid, contact your state Medicaid office directly. You can find your state office through the Medicaid website or by calling 211 (a free referral service). Your state office will tell you the income limits, what documents you need, and how to submit information. Some states allow online applications; others require paper forms or in-person visits.

If you think you may may have access to for both programs, start by confirming your Medicare status through Social Security or Medicare.gov, then contact your state Medicaid office to ask about low-income coverage. They can tell you whether you meet your state's income and resource limits.

Common situations where people have both programs

A 67-year-old with income below your state's Medicaid limit would have Medicare (by age) and Medicaid (by income). This person would pay no Medicare Part A premium, but would have a Part B premium; Medicaid would cover that premium and most cost-sharing.

A 55-year-old who has been receiving SSDI for three years would have Medicare (by disability) and may also have Medicaid if their income is low enough. Again, the two programs coordinate, with Medicare paying first.

A 72-year-old with moderate income who does not may have access to for Medicaid would have Medicare only. They would pay Part B and Part D premiums and cost-sharing out of pocket, unless they purchase Medigap coverage.

Frequently Asked Questions

Can I have both Medicare and Medicaid at the same time?

Yes. If you are 65 or older and have low income, you may have both. Medicaid is called the "payer of last resort," meaning Medicare pays first for covered services, and Medicaid covers the remaining costs. This combination significantly reduces your out-of-pocket expenses.

If I turn 65, do I automatically lose Medicaid?

No. You keep Medicaid if you continue to meet your state's income and resource limits. When you turn 65, you become may be able to access for Medicare, but Medicaid does not end. You will have both programs if your income remains low enough.

Does Medicare cover long-term nursing home care?

Medicare covers up to 100 days of skilled nursing care after a hospital stay, but not custodial long-term care in a nursing home. Medicaid covers long-term nursing home care in most states if you meet income and resource limits. This is one major difference between the programs.

What if I am under 65 and not disabled — can I get Medicare?

No. Medicare is for people 65 and older, people with certain disabilities who have received SSDI for two years, and people with end-stage renal disease. If you are under 65 and not in one of these groups, you would look to Medicaid (if your income is low) or the health insurance marketplace for coverage.

How do I know my state's Medicaid income limit?

Contact your state Medicaid office directly — income limits vary by state and family size. You can find your state office through the Medicaid website or call 211. They will tell you the exact limit for your situation and what documents you need to provide.