The Core Difference: Who Pays and Who Gets Covered

Medicare is a federal insurance program you pay into through payroll taxes during your working years. You become covered at age 65, regardless of income. Medicaid is a joint federal and state program that covers people with low income, regardless of age. The key distinction: Medicare is based on age and work history; Medicaid is based on income and assets.

Medicare is the same in every state. Medicaid rules vary significantly by state — what covers you in one state may not in another. Both programs pay hospitals, doctors, and pharmacies directly, so you do not pay the full bill upfront.

You can have both programs at the same time. When you turn 65 and have low income, you may be covered by Medicare as your primary insurance and Medicaid as a secondary payer that covers costs Medicare does not.

Key Takeaways

  • Medicare covers people age 65 and older, plus some younger people with disabilities or end-stage renal disease, and is the same nationwide.
  • Medicaid covers people with low income and limited assets, and the income and asset limits vary by state.
  • Medicare requires you to have worked and paid payroll taxes; Medicaid does not require work history.
  • You can hold both Medicare and Medicaid at the same time, and Medicaid can pay for costs that Medicare does not cover.
  • Both programs pay providers directly, but you may still owe copayments, coinsurance, or deductibles depending on the service.

Who Medicare Covers

You are covered by Medicare if you are age 65 or older and you or your spouse paid Medicare taxes for at least 10 years while working. You do not have to be retired — you can still be working and be covered by Medicare once you turn 65.

Some people under 65 also may have access to: those who have received Social Security Disability Insurance (SSDI) for 24 months, those with end-stage renal disease (ESRD), and those with amyotrophic lateral sclerosis (ALS). Income does not matter for Medicare — a millionaire and a person with no income both get the same coverage at 65.

You must sign up for Medicare during your enrollment window. If you turn 65, you have a seven-month window centered on your birth month. If you miss that window, you pay a permanent penalty on your premiums. The exception: if you are still working and covered by your employer's health plan, you can delay enrollment without penalty.

Who Medicaid Covers

Medicaid covers people with low income and limited assets. The income limit varies by state and by family size. In 2024, some states cover adults earning up to 138% of the federal poverty level (about $1,810 per month for a single person), while others cover only people earning much less. Your state's Medicaid office publishes its current income and asset limits.

Medicaid also covers children, pregnant people, parents of dependent children, people over 65, and people with disabilities — but only if their income and assets fall below the state limit. Some states have expanded Medicaid to cover more adults; others have not. Where you live determines whether you can get Medicaid based on income alone.

Unlike Medicare, Medicaid has no work requirement. You do not need to have paid taxes or worked to may have access to. You only need to meet your state's income and asset limits and be a U.S. citizen or may have access to immigrant.

What Each Program Covers

Medicare has four parts. Part A covers hospital stays, skilled nursing facility care, hospice, and some home health services. Part B covers doctor visits, outpatient services, lab tests, and preventive care. Part D covers prescription drugs. Part C (Medicare Advantage) is an alternative to Parts A and B offered by private insurers — it bundles hospital and doctor coverage and usually includes prescription drug coverage.

Medicare does not cover dental, vision, hearing aids, or long-term custodial care (nursing home care for non-medical reasons). You can buy a supplemental policy (called Medigap) to cover some of these gaps, or you can choose Medicare Advantage, which often includes dental and vision but has different out-of-pocket costs.

Medicaid covers doctor visits, hospital stays, emergency services, lab tests, X-rays, preventive care, and prescription drugs. Many state Medicaid programs also cover dental, vision, hearing aids, and long-term care in nursing homes — but coverage varies by state. Some states cover mental health and substance use treatment; others do not. Check your state's Medicaid program for the exact list.

Costs You Pay Out of Pocket

Medicare Part A has a deductible (in 2024, $1,676 per hospital stay) and coinsurance for stays longer than 60 days. Part B has a monthly premium (in 2024, $164.90 for most people), a $240 annual deductible, and 20% coinsurance after the deductible. Part D has a monthly premium that varies by plan, an annual deductible, and copayments for drugs.

Medicaid copayments and coinsurance are much lower than Medicare, and many services have no copayment at all. Some states charge $1 to $3 per doctor visit or prescription. Medicaid cannot charge copayments for emergency services, preventive care, or family planning. If you have both Medicare and Medicaid, Medicaid usually pays the copayments and coinsurance that Medicare does not cover.

If you cannot afford Medicare premiums and out-of-pocket costs, you may be able to get help through Medicaid or through Medicare Savings Programs (state programs that pay your Medicare premiums and cost-sharing). These programs have income limits but are separate from regular Medicaid.

How to Enroll in Each Program

You enroll in Medicare through Social Security. You can apply online at ssa.gov, by phone at 1-800-772-1213, or in person at your local Social Security office. You must enroll during your seven-month enrollment window (three months before your birth month, your birth month, and three months after). If you miss the window, you can enroll during the General Enrollment Period (January 1 to March 31 each year), but you will pay a permanent penalty.

You enroll in Medicaid through your state's Medicaid office or through your state's health insurance marketplace. Each state runs its own application process. Some states use an online portal; others require you to mail or fax a paper application. You can apply any time — there is no enrollment window. Your state will tell you within 30 to 45 days whether you are covered.

If you think you may be covered by both programs, apply to Medicaid first. If you are approved, Medicaid will tell you whether you also may have access to for Medicare Savings Programs. If you are already on Medicare and think you may have access to for Medicaid, contact your state Medicaid office directly.

State Differences in Medicaid Coverage

Medicaid rules differ by state in ways that matter. Some states have expanded Medicaid to cover adults earning up to 138% of the federal poverty level; others cover only people earning 50% of the poverty level or less. Some states cover dental and vision; others do not. Some states cover long-term care in nursing homes; others limit it.

Your state's Medicaid office publishes its income limits, covered services, and copayment amounts. You can find your state's office through the Centers for Medicare and Medicaid Services (CMS) website at medicaid.gov, or you can call 211 to be connected to your local Medicaid office. The rules can change year to year, so check your state's current rules before you assume you do or do not may have access to.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older and have low income, you can be covered by both. Medicare is your primary insurance, and Medicaid pays for costs Medicare does not cover, including copayments and services Medicare does not include. People covered by both are sometimes called "dual may be able to access."

Do I have to pay premiums for Medicaid?

Most people do not pay a monthly premium for Medicaid. Some states charge a small monthly premium for certain groups (usually working-age adults), but the premium is typically very low — often $5 to $15 per month. Check your state's rules to be sure.

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

Medicare coverage stays the same — it is federal and does not change when you move. Your Medicaid coverage may change, because each state has different income limits and covered services. When you move, contact your new state's Medicaid office to find out whether you still may have access to and what services are covered.

Can I choose which Medicare plan I want?

Yes. You can choose Original Medicare (Parts A and B) plus a separate Part D plan and an optional Medigap supplemental policy, or you can choose Medicare Advantage (Part C), which bundles hospital, doctor, and usually prescription drug coverage. You can switch plans once per year during the Annual Enrollment Period (October 15 to December 7).

What if I do not have 10 years of work history but I am turning 65?

If you do not have 10 years of Medicare tax payments yourself, you may be covered as a spouse or ex-spouse of someone who does. If you are not covered by Medicare at 65, you may be able to get Medicaid based on income, or you can buy a private health insurance plan through the health insurance marketplace.