The core difference: who runs it and who it covers

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 you become covered at age 65 regardless of income. Some younger people with disabilities or end-stage renal disease also may have access to.

Medicaid is a joint federal and state program. Each state designs and runs its own Medicaid program within federal guidelines, which means coverage rules, income limits, and what services are covered vary significantly by state. Medicaid is means-tested — your income and assets determine whether you may have access to, and it is designed for people with lower incomes.

The simplest way to remember it: Medicare is based on age or disability status and how much you paid in taxes. Medicaid is based on how much money you have now.

Key Takeaways

  • Medicare is federal, available at 65, and funded through payroll taxes you paid while working; Medicaid is state-run, income-based, and available to people of any age who meet their state's income and asset limits.
  • Medicare covers hospital stays, doctor visits, and prescription drugs under separate parts (A, B, D); Medicaid coverage varies by state but typically includes doctor visits, hospital care, and long-term care services.
  • Medicare requires you to pay premiums, deductibles, and copays; Medicaid usually costs little or nothing, depending on your state and income level.
  • You can have both programs at the same time — this is called "dual may be able to access" — and Medicaid often covers Medicare's out-of-pocket costs.
  • Income limits for Medicaid differ by state and by category (children, adults, seniors, disabled people); there is no income limit for Medicare once you turn 65.

How Medicare is structured and what it covers

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

Most people pay a monthly premium for Part B and Part D. Part A is usually free if you or your spouse paid Medicare taxes for at least 10 years. You also pay deductibles and copays when you use services. For 2024, the Part B deductible is $240 per year, though this amount changes annually.

Medicare does not cover long-term care (nursing home or in-home care for non-medical reasons), dental work, vision care, or hearing aids — though some Medicare Advantage plans add these benefits.

How Medicaid is structured and what it covers

Medicaid covers a broader range of services than Medicare, but what is covered depends on your state. All states must cover doctor visits, hospital stays, emergency services, and lab work. Most states also cover prescription drugs, mental health services, and substance use treatment. Many states cover dental care and vision care, though not all.

A major difference: Medicaid covers long-term care services — both nursing home care and home and community-based services that help you stay in your own home. This is one reason Medicaid is often the primary payer for people over 65 who need ongoing care.

Medicaid income limits vary by state and by category. A parent of a child may have a higher income limit than a single adult. A person over 65 may have different limits than a working-age adult. Some states expanded Medicaid under the Affordable Care Act to cover adults earning up to 138% of the federal poverty level; others did not expand and have lower limits. You must check your specific state's rules.

Cost differences: what you pay out of pocket

Medicare requires you to pay premiums and cost-sharing. Part B premiums are typically $164.90 per month in 2024 (higher earners pay more). Part D premiums vary by plan and pharmacy. You pay a deductible before coverage begins, and you pay copays or coinsurance for each service. After you spend a certain amount out of pocket, Medicare covers 80% of most services, but you still pay 20%.

Medicaid is much cheaper or free. Most states charge no premium for Medicaid. Some charge small copays for doctor visits or prescriptions, but many exempt certain groups (children, pregnant people, emergency services) from copays. If your income is very low, you may pay nothing at all.

This cost difference is why many people over 65 who have both Medicare and Medicaid rely on Medicaid to pay Medicare's premiums and cost-sharing. This is called "dual may be able to access" status.

Who qualifies: age, disability, and income

You may have access to for Medicare if you are 65 or older, or if you are under 65 and have received Social Security Disability Insurance (SSDI) for 24 months, or if you have end-stage renal disease or ALS (Lou Gehrig's disease). There is no income limit — a millionaire at 65 qualifies for Medicare.

Medicaid qualification depends on your state, but generally you must have income below a certain threshold and limited assets. Income thresholds are usually between 100% and 200% of the federal poverty level, though some states set them higher or lower. Asset limits also vary — some states have no asset limit, while others limit you to $2,000 in countable resources.

Some people may have access to for both. If you are 65 or older and have low income, you may be both Medicare-may be able to access and Medicaid-may be able to access. If you are under 65 and on SSDI with low income, you may also may have access to for Medicaid. Your state determines whether you are "dual may be able to access" based on your specific situation.

When you might have both programs at once

Being "dual may be able to access" means you have both Medicare and Medicaid. This happens most often when you are 65 or older with low income, or when you are on SSDI and your income is below your state's Medicaid limit.

When you have both, Medicare is your primary payer — it pays first for services it covers. Medicaid is secondary — it pays some or all of what Medicare does not cover. Medicaid also covers services Medicare does not, like long-term care and dental care (in states that cover them).

Many people who are dual may be able to access are enrolled in a special type of Medicare Advantage plan called a D-SNP (Dual may be able to access Special Needs Plan) or a PACE program (Program of All-Inclusive Care for the Elderly). These programs coordinate Medicare and Medicaid benefits and often include services like transportation, meals, and adult day care that regular Medicare does not cover.

How to find out which program you may have access to for

For Medicare: If you are 65 or older, you are automatically enrolled in Medicare Part A and Part B when you turn 65, as long as you have been a U.S. citizen or permanent resident for at least 5 years. You can check your Medicare status online at Medicare.gov or call 1-800-MEDICARE.

For Medicaid: Contact your state's Medicaid office or your local social services department. You can also use Healthcare.gov to find your state's Medicaid contact information and learn your state's income limits. Each state's rules are different, so you must check with your state directly.

If you think you might may have access to for both, start by contacting your state Medicaid office. They can tell you whether you are dual may be able to access and help you understand what each program covers in your state.

Frequently Asked Questions

Can I have Medicare and Medicaid at the same time?

Yes. If you are 65 or older with low income, or if you are on SSDI with low income, you may may have access to for both. Medicare pays first for services it covers, and Medicaid covers the gaps and services Medicare does not cover, like long-term care and dental care in many states.

Does Medicare cover long-term care or nursing homes?

Medicare covers up to 100 days of skilled nursing care after a hospital stay, but not custodial care or long-term stays in a nursing home. Medicaid covers long-term nursing home care and in-home care services, which is why many people over 65 rely on Medicaid for these services.

What is the income limit for Medicaid?

It varies by state. Most states use between 100% and 200% of the federal poverty level, but some states set higher or lower limits. You must check your specific state's Medicaid office for the exact income limit that applies to you.

Do I have to pay premiums for Medicaid?

Most states charge no premium for Medicaid. Some charge small copays for certain services, but many exempt children, pregnant people, and emergency services from copays. Medicare, by contrast, requires premiums for Part B and Part D.

How do I sign up for Medicare at 65?

You are automatically enrolled in Medicare Part A and Part B when you turn 65 if you have been a U.S. citizen or permanent resident for at least 5 years. You can verify your enrollment at Medicare.gov or call 1-800-MEDICARE. You must actively choose a Part D prescription drug plan during the enrollment period.