The Core Difference: Who Runs Each Program

Medicare is a federal insurance program run by the Centers for Medicare & Medicaid Services (CMS). You pay into it through payroll taxes during your working years, and it becomes available to you at age 65, regardless of income. Medicaid is a joint federal and state program that each state runs differently. It is based on income and other factors, not age, and you do not pay into it through taxes.

The simplest way to remember the difference: Medicare is insurance you earn through work history. Medicaid is a needs-based program for people with low income. You can have both at the same time — this is called being "dual may be able to access" — but they serve different purposes and pay different things.

Key Takeaways

  • Medicare is federal, age-based (usually 65+), and funded by payroll taxes you paid while working; Medicaid is state-run, income-based, and funded by federal and state tax dollars.
  • Medicare covers hospital care, doctor visits, and prescription drugs through separate parts (A, B, D); Medicaid covers similar services but the exact coverage varies by state.
  • Medicare has the same rules nationwide; Medicaid rules, income limits, and covered services change from state to state.
  • You pay premiums, deductibles, and copays for Medicare; Medicaid typically has no premium but may have small copays depending on your state.
  • If you are under 65 and have low income, you may only be able to get Medicaid, not Medicare, unless you have a disability or end-stage renal disease.

How You Become Covered Under Each Program

You become may be able to access for Medicare when you turn 65, as long as you or your spouse worked and paid Medicare taxes for at least 10 years (40 quarters). If you are under 65, you can still 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. Age and work history are the only factors that matter — your income does not affect Medicare may be able to access.

Medicaid may be able to access depends on income, household size, and sometimes other factors like disability or pregnancy. Each state sets its own income limits. For example, one state might cover a single adult earning up to $1,500 per month, while another covers up to $2,000. Some states expanded Medicaid to cover more working-age adults; others did not. You must apply through your state's Medicaid office or through the Health Insurance Marketplace, and your may be able to access can change if your income changes.

What Each Program Covers

Medicare has four main parts. Part A covers hospital stays, skilled nursing facility care, and some home health care. Part B covers doctor visits, outpatient care, and medical equipment. Part D covers prescription drugs. Part C (Medicare Advantage) is an alternative way to get Parts A and B through a private insurance company, often bundled with Part D.

Medicaid covers doctor visits, hospital care, emergency services, and prescription drugs in every state. Beyond that, coverage varies widely. Some states cover dental care, vision, mental health services, and long-term care; others cover only the basics. You need to check your state's Medicaid program to know what is covered where you live. Medicaid also covers services Medicare does not, such as nursing home care and personal care assistance for people who need help with daily activities.

How Much You Pay Out of Pocket

Medicare requires you to pay a monthly premium for Part B (the amount changes yearly, but was $164.90 in 2024 for most people). You also pay a deductible before Medicare starts paying — for Part A hospital care, the deductible was $1,632 in 2024. After you meet the deductible, you pay copays or coinsurance for each service. For Part D prescription drugs, you pay a monthly premium and copays at the pharmacy. These costs add up, which is why many people on Medicare also buy supplemental insurance.

Medicaid typically has no monthly premium. Some states charge small copays — usually $1 to $5 per doctor visit or prescription — but many states waive copays for people with very low income. Pregnant women, children, and emergency services are often free. Because Medicaid costs less out of pocket, people with low income often prefer it to Medicare, even though Medicare covers more services in some cases.

Income Limits and Asset Tests

Medicare has no income limit. A person earning $100,000 per year is just as may be able to access at age 65 as someone earning $20,000. Your assets do not matter either.

Medicaid has strict income limits that vary by state. In 2024, most states set the limit somewhere between $1,000 and $2,500 per month for a single adult, but this changes yearly and differs based on family size. Some states also count your assets — savings, property, vehicles — and disqualify you if you have too much. Asset limits vary by state; some have none, and others cap assets at $2,000 for a single person. If you are applying for Medicaid, you will need to report your income and assets to your state's Medicaid office.

When You Might Have Both Medicare and Medicaid

If you are 65 or older and have low income, you may be may be able to access for both programs at the same time. This is called being "dual may be able to access." Medicare pays first for services it covers, and Medicaid fills in the gaps — paying your Medicare premiums, deductibles, and copays. Medicaid also covers services Medicare does not, like long-term nursing home care.

Dual may be able to access people are usually better off financially because Medicaid reduces their out-of-pocket costs. However, you must meet both programs' rules. You need to be 65 or older (or may have access to for Medicare another way) and have income low enough for your state's Medicaid program. If your income rises above your state's Medicaid limit, you lose Medicaid coverage but keep Medicare.

State-to-State Differences in Medicaid

Because Medicaid is run by states, the program you get in one state may look completely different in another. Income limits, covered services, copay amounts, and even the application process vary. For example, some states cover dental care for adults; others do not. Some states cover vision exams and glasses; others limit vision coverage to emergency care only. A person who moves from one state to another may lose or gain Medicaid coverage, or their coverage may change significantly.

Medicare, by contrast, is the same everywhere. A person on Medicare in California receives the same coverage as someone on Medicare in Texas. This is one reason Medicare is simpler to understand — there are no state-level variations to track.

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 may be may be able to access for both. Medicaid will pay some or all of your Medicare premiums and copays. You must meet both programs' requirements — age 65 (or another Medicare qualifier) and income low enough for your state's Medicaid limit.

What if I am under 65 and do not have Medicare?

If you are under 65, you can only get Medicare if you have a disability (and have been on SSDI for 24 months), end-stage renal disease, or ALS. Otherwise, you would need to look at Medicaid or marketplace insurance. Check your state's Medicaid income limits to see if you may have access to.

Do I pay premiums for Medicaid?

Most states do not charge a monthly premium for Medicaid. Some states charge small copays per visit or prescription, but many waive these for people with very low income. Check your state's Medicaid program for details about copays and premiums.

Why is my Medicaid coverage different from my neighbor's in another state?

Each state designs and runs its own Medicaid program within federal guidelines. States decide income limits, which services to cover, copay amounts, and may be able to access rules. This is why Medicaid in one state may cover dental care while another state does not.

What happens to my Medicaid if my income goes up?

If your income rises above your state's Medicaid limit, you will lose Medicaid coverage. You may then be able to buy insurance through the Health Insurance Marketplace or through an employer. If you are 65 or older, you would keep Medicare even if you lose Medicaid.