The core difference: who pays and who is covered
Medicare is a federal insurance program you pay into through payroll taxes during your working years. You become covered at 65, regardless of income. Medicaid is a joint federal and state program that covers people with low income, regardless of age. The two programs have almost nothing in common except the word "medical" in their names.
Medicare is run by the Centers for Medicare & Medicaid Services (CMS), a federal agency. Medicaid is run by each state, which means the income limits, covered services, and enrollment rules vary significantly depending on where you live. A person can have both programs at the same time — this is called "dual coverage" — but they serve different purposes and pay different providers.
Think of Medicare as an earned benefit: you worked and paid in, so you get coverage when you turn 65. Think of Medicaid as a need-based benefit: if your income is low enough, you get coverage regardless of your work history or age.
Key Takeaways
- Medicare covers people 65 and older, some younger people with disabilities, and people with end-stage renal disease, paid for through payroll taxes.
- Medicaid covers people with low income at any age, and the income limit depends on your state and family size.
- Medicare has the same rules nationwide; Medicaid rules, income limits, and covered services change by state.
- You can have both Medicare and Medicaid at the same time, and some people do.
- Medicare requires you to sign up at 65 or face penalties; Medicaid enrollment is continuous in most states.
Who Medicare covers and how much it costs
You are covered by Medicare automatically at 65 if you have worked at least 10 years in jobs where you paid Medicare taxes. You do not have to be retired. If you have not worked that long, you can still buy into Medicare, but the premium is higher.
Medicare has four parts. Part A covers hospital stays, skilled nursing, hospice, and some home health care. Part B covers doctor visits, outpatient care, and some preventive services. Part D covers prescription drugs. Part C, also called Medicare Advantage, is an alternative to Parts A and B offered by private insurance companies. Most people pay a monthly premium for Part B and Part D. Part A is usually free if you have worked the required years.
Medicare does not cover everything. It does not cover dental, vision, hearing aids, or long-term custodial care. You may buy a supplemental policy (called Medigap) to cover some of these gaps, or you may choose Part C, which often includes extra coverage but limits which doctors you can see.
Who Medicaid covers and how much it costs
Medicaid covers people with low income. The exact income limit depends on your state and family size. In most states, a single adult with income below 138% of the federal poverty line qualifies; a family of three may may have access to with income up to roughly $2,600 per month, but this varies. Some states have lower limits. You can find your state's limit by contacting your state Medicaid office or using the federal Medicaid website.
Medicaid is free or very low cost. You do not pay a monthly premium in most states. You may pay a small copay when you see a doctor or fill a prescription, but the copay is usually $1 to $5. Medicaid covers doctor visits, hospital stays, prescription drugs, dental (in some states), vision (in some states), mental health care, and long-term care in nursing homes — services Medicare does not cover.
Medicaid enrollment is open year-round in most states. You can sign up at any time if you meet the income requirement. You do not face penalties for signing up late, unlike Medicare.
What each program covers: a side-by-side comparison
| Service | Medicare | Medicaid |
|---|---|---|
| Doctor visits | Yes (Part B) | Yes |
| Hospital stays | Yes (Part A) | Yes |
| Prescription drugs | Yes (Part D) | Yes |
| Preventive care (screenings, vaccines) | Yes (Part B) | Yes |
| Mental health and substance use treatment | Yes (limited) | Yes |
| Dental | No | Varies by state |
| Vision and eyeglasses | No | Varies by state |
| Hearing aids | No | Varies by state |
| Nursing home care (long-term) | Limited (up to 100 days) | Yes |
| Home health care | Yes (Part A, if homebound) | Yes |
When you might have both Medicare and Medicaid
Some people are covered by both programs. This usually happens when someone turns 65 and qualifies for Medicare but has low enough income to also may have access to for Medicaid. The person is called "dual may be able to access." Medicaid then pays some of the costs Medicare does not cover, like copays and premiums.
If you are on Medicaid now and turn 65, you will be automatically enrolled in Medicare Part A and Part B. You do not have to do anything. Medicaid will continue to cover you as well, as long as you still meet the income requirement. If your income is above your state's Medicaid limit but you cannot afford Medicare premiums, you may be able to get help paying them through a Medicare Savings Program, which is run by your state.
How to find out which program covers you
If you are 65 or older, you are covered by Medicare unless you chose not to sign up. If you did not sign up at 65, you can sign up during the General Enrollment Period (January 1 to March 31 each year), but you will pay a higher premium for the rest of your life.
If you are under 65 and have low income, you may be covered by Medicaid. To find out, contact your state Medicaid office. You can find the phone number and website by searching "[your state] Medicaid" or by calling 211, which is a free referral line that connects you to local programs. You can also apply online through your state's website or through Healthcare.gov.
If you are under 65 and do not have low income, neither Medicare nor Medicaid will cover you. You would need to buy private insurance through your employer, the Affordable Care Act marketplace, or directly from an insurance company.
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 have both. Medicaid will help pay your Medicare premiums and copays. You must meet your state's Medicaid income limit to keep Medicaid coverage.
What happens if I do not sign up for Medicare at 65?
You can sign up later, but you will pay a higher premium for Part B and Part D for the rest of your life. The penalty is 10% per year you delay. If you have employer health insurance at 65, you may be able to delay without penalty, but you must tell Medicare.
Does Medicaid cover dental and vision?
It depends on your state. Some states cover dental and vision through Medicaid; others do not. Contact your state Medicaid office to find out what is covered where you live.
How do I know if my income is low enough for Medicaid?
Each state sets its own income limit based on family size. Call your state Medicaid office or 211 to learn the limit for your situation. You can also apply online through your state's Medicaid website or Healthcare.gov, and the system will tell you whether you may have access to.
If I am on Medicaid and turn 65, do I automatically get Medicare?
Yes. You will be automatically enrolled in Medicare Part A and Part B at 65. Medicaid will continue to cover you as long as your income stays below your state's limit. You do not need to do anything.