Medicare and Medicaid are separate federal programs with different purposes, funding sources, and who they cover

Medicare is a federal health insurance program for people 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 insurance program you have earned.

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, which means may be able to access rules, covered services, and payment rates differ by state. Medicaid is funded through general tax revenue, not through individual payroll contributions.

The confusion is understandable — the names are similar and both are government health programs — but they operate on completely different logic. Medicare is age-based and contribution-based. Medicaid is income-based and state-administered. A person can be enrolled in both at the same time, which is called being "dual may be able to access."

Key Takeaways

  • Medicare covers people 65 and older, while Medicaid covers low-income people of any age, with rules that vary by state.
  • Medicare is funded through payroll taxes and is the same nationwide; Medicaid is funded through general taxes and differs by state.
  • You do not choose Medicaid based on age — you must meet your state's income and asset limits to be covered.
  • Some people may have access to for both programs at once, which can lower their out-of-pocket costs for medical care.

How Medicare may be able to access works

You become may be able to access for Medicare automatically at 65 if you are a U.S. citizen or permanent resident who has lived in the country for at least five years. You do not have to be retired or have a certain income level. If you are already receiving Social Security benefits, Medicare enrollment happens automatically. If you are not yet receiving Social Security, you must sign up during your initial enrollment period, which begins three months before the month you turn 65.

Younger people can also get Medicare if they have been receiving Social Security Disability Insurance (SSDI) for 24 months, or if they have end-stage renal disease or ALS (amyotrophic lateral sclerosis). In these cases, age does not matter.

Missing your initial enrollment period can result in a permanent penalty on your premiums, so the timing matters. Your state health department or Social Security office can tell you the exact dates for your situation.

How Medicaid may be able to access works

Medicaid may be able to access depends on your state's rules, your income, your household size, and sometimes your age or disability status. Most states cover children, pregnant people, parents of dependent children, and people with disabilities or over 65. However, the income thresholds vary widely — a family of three might may have access to in one state but not in a neighboring state.

After the federal Public Health Emergency ended in March 2023, many states began removing people from Medicaid rolls. Some states have already completed this process; others are still working through it. If you were on Medicaid before the emergency, you may have lost coverage even if your income and circumstances have not changed. You can reapply at any time, and your state's Medicaid office can tell you whether you currently meet the income limits.

Unlike Medicare, Medicaid has asset limits in most states — meaning if you own too much in savings, property, or investments, you may not may have access to. These limits vary by state and by category (for example, limits for elderly people are often different from limits for families with children).

What each program covers

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

Medicare does not cover long-term care, dental, vision, or hearing aids, though some Medicare Advantage plans offer limited coverage for these services. You may need to buy supplemental insurance (called Medigap) to cover costs Medicare does not pay.

Medicaid covers a broader range of services because each state designs its own program. All states must cover hospital care, doctor visits, emergency services, and some preventive care. Most states also cover dental, vision, hearing aids, and long-term care — services Medicare does not cover. This is one reason dual-may be able to access people often have lower out-of-pocket costs: Medicaid fills gaps that Medicare leaves.

Cost differences between the two programs

Medicare requires you to pay premiums, deductibles, and copayments. Part B has a monthly premium (the standard amount in 2024 is $164.90, but it varies by income). Part A is usually free if you paid Medicare taxes for at least 10 years. Part D premiums vary by plan. You also pay a deductible before coverage begins and copayments when you use services.

Medicaid has no premiums in most states, though a few states charge small premiums for certain groups. Copayments are usually lower than Medicare copayments or nonexistent. However, Medicaid reimbursement rates to doctors are often lower than Medicare rates, which can make it harder to find providers who accept Medicaid.

If you are dual may be able to access, Medicaid typically pays your Medicare premiums and covers your deductibles and copayments, which significantly reduces your costs.

When you might have both programs at once

You are dual may be able to access if you meet the age or disability requirements for Medicare and also meet your state's income and asset limits for Medicaid. This is common for people 65 and older with low incomes, and for younger people with disabilities who receive SSDI.

Being dual may be able to access is generally advantageous because Medicaid covers services Medicare does not, such as long-term care and dental work. Medicaid also pays your Medicare premiums and cost-sharing, which can save you hundreds of dollars per month. However, you must be enrolled in both programs — being on Medicare alone does not automatically put you on Medicaid, even if you meet the income threshold.

If you think you might be dual may be able to access, contact your state Medicaid office. They can tell you whether you meet the income and asset limits and help you understand what each program covers in your situation.

State differences in Medicaid that matter

Because Medicaid is state-run, the program you have access to depends entirely on where you live. Some states have expanded Medicaid to cover adults earning up to 138% of the federal poverty level; others have not expanded and cover only specific groups like parents of young children or people with disabilities.

Income limits, covered services, and provider networks all vary by state. A service covered in one state may not be covered in another. If you move to a different state, your Medicaid coverage may change, and you may need to reapply. Your new state's Medicaid office can tell you what coverage is available and whether you meet the may be able to access rules.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older (or younger with a disability) and meet your state's income and asset limits, you can be enrolled in both. Medicaid will pay your Medicare premiums and cost-sharing, which usually saves you money. Contact your state Medicaid office to see if you may have access to.

Do I have to pay for Medicare?

Part A is usually free if you paid Medicare taxes for at least 10 years. Part B requires a monthly premium (currently around $165 for most people, though it is higher for those with higher incomes). Part D (prescription drug coverage) has a monthly premium that varies by plan. If you are also on Medicaid, Medicaid pays these premiums for you.

What happens to my Medicaid if I turn 65?

You become may be able to access for Medicare at 65, but you do not automatically lose Medicaid. If you meet your state's income and asset limits, you can stay on Medicaid and be dual may be able to access. Your state Medicaid office can tell you whether your coverage continues and what changes, if any, will happen to your benefits.

Why do some states have different Medicaid rules than others?

Medicaid is a partnership between the federal government and individual states. The federal government sets minimum standards, but each state decides who to cover, what services to pay for, and how much to pay providers. This is why a person might may have access to for Medicaid in one state but not in another, even with the same income.

If I move to a different state, what happens to my coverage?

Your Medicaid coverage ends when you move, because each state runs its own program. You must reapply in your new state using that state's rules and income limits. Contact your new state's Medicaid office as soon as you move to find out whether you may have access to and how to enroll.