Medicare versus Medicaid: Key differences

Medicare and Medicaid are government health insurance programs that help people pay for medical costs. But there are important differences between the two programs, including who qualifies for each and what's covered under each one.

What is Medicare?

Medicare is federal health insurance for anyone ages 65 years and older, as well as for younger people with certain disabilities and conditions. Nearly 68 million people were enrolled in Medicare as of August 2024. There are two main forms of Medicare.

Original Medicare, which includes:

• Part A — hospital insurance: This covers inpatient hospital stays, limited skilled nursing facility care, hospice care, and some home health care.
• Part B — medical insurance: This covers doctors' services (including telehealth), outpatient care, medical supplies, and preventive services such as mammograms and colonoscopies.
• Medicare Part D, which offers prescription drug coverage, is an optional add-on to Original Medicare.

Medicare Advantage, also known as Medicare Part C: This is an "all in one" alternative to Original Medicare. These bundled plans include Part A, Part B, and usually Part D. Medicare Advantage is a Medicare-approved private plan.

There are pros and cons to each program. Medicare Advantage plans tend to be less expensive and may offer extras like some dental or vision coverage. However, they usually require you to only see medical providers in your network, and may require more prior authorizations for procedures.

Original Medicare allows you to use any doctor or hospital throughout the U.S. that accepts Medicare. You can also purchase a Medigap plan to help cover your out-of-pocket costs.

What is Medicaid?

Medicaid is a joint federal and state program that provides health coverage to people with limited income. Over 72 million people are currently enrolled in Medicaid, according to the Centers for Medicare and Medicaid services (CMS).

All state Medicaid programs must cover inpatient and outpatient hospital services, doctor visits, laboratory tests, x-rays, and home health services. Other services, like prescription drug coverage or physical therapy, can vary from state to state.

Key differences between Medicare and Medicaid

It can be hard to understand the differences between Medicare and Medicaid. The two programs differ in a few important ways:

Eligibility. Most people can't access Medicare until they reach the age of 65. Medicaid, on the other hand, is open at any age to people with a limited income.

Administration. Medicare is run solely by the federal government. Medicaid is both a federal and state program. The federal government sets basic rules and guidelines, but each state determines who is eligible, and what the benefits are.

Coverage. Medicaid often covers things Medicare doesn't, including nursing home care, transportation to doctor appointments, home-based services, and dental, vision, and hearing exams.

Cost. If you have Medicare, you still need to pay out of pocket for premiums, copays, and a deductible. In 2025, the standard monthly premium for Medicare Part B enrollees will be $185, and the deductible will be $257. Out-of-pocket costs are much less for Medicaid, and certain groups, like children and pregnant women, are exempt from paying most costs.

Who qualifies for Medicare?

To qualify for Medicare, you need to be age 65 or older. You may also qualify if you are younger than 65 and meet certain criteria, including:

• you have received Social Security disability benefits (SSDI) for at least two years
• you have permanent end-stage renal disease (that is, kidney disease requiring dialysis or a transplant)
• you have Lou Gehrig's disease (also known as amyotrophic lateral sclerosis, or ALS).

Who qualifies for Medicaid?

Medicaid eligibility is income and asset based. You'll need to meet a certain low-income level to get assistance. The qualifying income level varies by state. You can find out if you qualify on the HealthCare.gov website.

Can you have Medicare and Medicaid at the same time?

If you meet eligibility requirements, you may qualify for both Medicaid and Medicare. Usually, you're first enrolled in one and then become eligible for the other. For any service you receive, Medicare pays first and covers all eligible costs. Then, any qualified costs not covered by Medicare will be covered by Medicaid.

Even if you do qualify for Medicare and Medicaid, it can be hard to manage both. According to a 2024 study published in JAMA Health Forum, enrolling in a dual-eligible special needs plan (D-SNP), can help. These are Medicare Advantage plans that coordinate all of your covered Medicare and Medicaid care benefits.

Medicare and Medicaid can be confusing. You may need some help to understand all your benefits and options. For help with Medicare, call 800-MEDICARE (800-633-4227), or live chat with a Medicare staffer here. For help with Medicaid, call 877-267-2323.