Medicaid and Medicare are separate federal programs with different purposes, may be able to access rules, and what they cover

Medicare is a federal health insurance program for people age 65 and older, regardless of income. It also covers some younger people with disabilities and people with 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 pays for health care for people with low incomes. Each state runs its own Medicaid program within federal guidelines, so may be able to access and what is covered vary by state. Medicaid is not based on age — it is based on income and other factors.

The confusion between the two is common because their names are similar and both are government health programs. But they are run by different agencies, funded differently, and serve different populations. Understanding which one you might use — or whether you may have access to for both — matters for knowing what your health care will cost.

Key Takeaways

  • Medicare is for people 65 and older or with certain disabilities, while Medicaid is for people with low incomes, and the two programs have completely different may be able to access rules.
  • Medicare is funded by payroll taxes and is the same nationwide, while Medicaid is jointly funded by federal and state money and varies significantly by state.
  • Some people may have access to for both programs at the same time, a situation called "dual may be able to access," and in those cases Medicaid often pays costs that Medicare does not cover.
  • Medicare has four parts (A, B, C, and D) that cover different services, while Medicaid covers vary by state but typically include doctor visits, hospital stays, and prescription drugs.

How Medicare Works and Who It Covers

Medicare is administered by the Centers for Medicare and Medicaid Services (CMS), a federal agency. You become may be able to access for Medicare automatically when you turn 65, as long as you or your spouse paid Medicare taxes for at least 10 years while working. If you are younger than 65, you can get Medicare if you have been receiving Social Security Disability Insurance (SSDI) for 24 months, or if you have end-stage renal disease or ALS.

Medicare has four parts. Part A covers hospital stays, skilled nursing facility care, and some home health services. Part B covers doctor visits, outpatient care, and medical equipment. Part C, also called Medicare Advantage, is an alternative way to get Parts A and B through a private insurance company. Part D covers prescription drugs. Most people pay a monthly premium for Part B and Part D, and there are deductibles and copayments when you use services.

Medicare is the same in every state. The coverage rules, the amounts you pay, and the services included do not change based on where you live. This consistency makes it easier to understand what your coverage includes, though your actual costs depend on which parts you choose and which plan you select.

How Medicaid Works and Who It Covers

Medicaid is run by individual states under federal guidelines, which means the program looks different depending on where you live. Your state determines the income limit for Medicaid, what services are covered, how much providers are paid, and whether certain groups of people are covered at all. Because of this, a person who qualifies for Medicaid in one state might not may have access to in another state, or might receive different coverage.

Generally, Medicaid covers people with low incomes, including children, pregnant people, parents, seniors, and people with disabilities. Some states have expanded Medicaid to cover more working-age adults with low incomes; others have not. The income limits vary widely — in some states the limit is very low, and in others it is higher. You can check your state's specific rules through your state Medicaid office or through Healthcare.gov.

Medicaid typically covers doctor visits, hospital stays, prescription drugs, mental health services, and long-term care. Many states also cover dental care and vision care, though not all do. Because Medicaid is state-run, the exact list of covered services and the rules for accessing them differ by state. If you move to a different state, you will need to reapply for Medicaid there.

When Someone Qualifies for Both Medicare and Medicaid

Some people are old enough for Medicare and also have low enough income to may have access to for Medicaid. These people are called dual may be able to access. When you are dual may be able to access, Medicare is your primary insurance and Medicaid is secondary — meaning Medicare pays first, and Medicaid covers some of what Medicare does not pay.

Dual may be able to access status is common among older adults with low incomes and people with disabilities who receive SSDI. In this situation, Medicaid often pays your Medicare premiums, deductibles, and copayments, which can significantly reduce your out-of-pocket costs. Some states also offer special programs for dual may be able to access people that coordinate care between the two programs.

If you think you might be dual may be able to access, contact your state Medicaid office. They can tell you whether you may have access to for Medicaid and, if you do, how the two programs will work together in your case.

Funding and How These Programs Are Paid For

Medicare is funded primarily through payroll taxes. When you work, you and your employer each pay a Medicare tax of 1.45 percent of your wages. Self-employed people pay 2.9 percent. These taxes go into a trust fund that pays for Medicare services. This is why Medicare is sometimes described as an "earned" benefit — you paid into it during your working years.

Medicaid is funded jointly by the federal government and individual states. The federal government pays a percentage of Medicaid costs (the percentage varies by state), and the state pays the rest. This shared funding model is why Medicaid programs vary so much by state — states have some flexibility in how they design their programs within federal rules, and their funding levels affect what they can cover.

Because of these different funding sources, changes to Medicare require federal action, while changes to Medicaid can happen at the state level. This is why Medicaid coverage and may be able to access can shift more frequently than Medicare coverage.

What Each Program Covers and Does Not Cover

Medicare covers many common health services but has gaps. It covers hospital stays, doctor visits, some preventive care, and prescription drugs (through Part D). It does not cover routine dental care, vision care, hearing aids, or long-term custodial care in a nursing home. If you need these services, you either pay out of pocket or purchase supplemental insurance.

Medicaid coverage varies by state, but most state programs cover more services than Medicare does. Many Medicaid programs include dental care, vision care, and long-term care services. However, because Medicaid is for people with low incomes, it often has stricter limits on how much you can earn and own in assets. Some services may also require prior approval before you can use them.

The trade-off is this: Medicare is more predictable and the same everywhere, but it has more gaps in coverage. Medicaid covers more services in many states, but the rules and coverage change depending on where you live and can change year to year as your state updates its program.

How to Find Out Which Program You Might Use

If you are 65 or older, you are may be able to access for Medicare. You should sign up during your initial enrollment period, which is the three months before the month you turn 65, the month you turn 65, and the three months after. If you miss this window, you can still sign up later, but you may pay a permanent penalty on your premiums.

To find out whether you may have access to for Medicaid, contact your state Medicaid office or visit Healthcare.gov. You will need to provide information about your income, household size, and citizenship status. If you are applying for Medicaid, the process and timeline vary by state — some states process applications in a few weeks, while others take longer.

If you are disabled and under 65, you may may have access to for SSDI, which makes you may be able to access for Medicare after 24 months. You can apply for SSDI through the Social Security Administration. If you have low income and are under 65, Medicaid is usually your main option for health coverage, though the income limits and what is covered depend on your state.

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, or if you are younger and disabled with low income, you may may have access to for both. When you have both, Medicare pays first and Medicaid covers some of what Medicare does not pay, including premiums and copayments. Contact your state Medicaid office to learn about you may have access to.

Do I have to pay for Medicare?

Most people pay a monthly premium for Part B (doctor visits) and Part D (prescription drugs). You also pay deductibles and copayments when you use services. Part A (hospital care) is usually free if you or your spouse paid Medicare taxes for 10 years. If you have Medicaid as well, Medicaid may pay your premiums and copayments.

Does Medicaid cover long-term care in a nursing home?

Many state Medicaid programs do cover long-term nursing home care, but Medicare does not. However, Medicaid has strict rules about income and assets — you may need to spend down your savings before Medicaid will pay. The rules vary significantly by state, so check with your state Medicaid office about what is covered and what the limits are.

What happens to my Medicaid if I move to a different state?

Your Medicaid coverage ends when you move. You will need to apply for Medicaid in your new state, and the may be able to access rules and coverage may be different. Some states process new applications quickly, while others take several weeks. Apply as soon as you move to avoid a gap in coverage.

Can I use my Medicare or Medicaid in other states?

Medicare works the same way in all states — your coverage travels with you. Medicaid does not travel; you must be a resident of the state where you are using Medicaid, and coverage ends if you move. If you travel or move, make sure you understand how your coverage will work in the new location.