Medicare vs. Medicaid: The Important Differences to Know
Medicare usually covers seniors, while Medicaid usually covers people or families with low incomes.
The federal government funds both Medicare and Medicaid. But Medicaid also gets money from the states. This lets states partially decide who qualifies and what is covered. You can get coverage from both programs if you qualify.
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Differences between Medicare vs. Medicaid
Medicare and Medicaid are both health insurance programs offered to U.S. citizens and permanent residents. The main differences between the two programs are who is eligible for benefits and what's covered. For example, Medicare usually covers people 65 and older, while Medicaid covers people with low incomes, no matter how old they are.
| Who is eligible? | Seniors or those with a disability (all income levels) | People with low incomes (all ages) |
| What does it cover? | Hospital, doctor and medications | Hospital, doctor and medications (some added benefits) |
| What affects coverage? | The plans you buy | The state you live in |
| What does it cost? | At least $174.70 per month | Usually free or cheap |
| Who funds the program? | Federal government | Federal and state governments |
Coverage with Medicare vs. Medicaid
Medicaid covers nursing homes and long-term care. Medicare doesn't.
The biggest difference overall between the two programs is nursing home coverage.
Medicaid gives you more coverage overall. It's a single plan that gives you medical, hospital and prescription drug coverage. In some states, Medicaid also covers vision and dental care for adults.
Medicare is made of several parts, each providing different coverage. Original Medicare includes Parts A and B, which covers hospital and doctor office care. You can get more coverage by adding other plans, like Part D, Medigap or Medicare Advantage.
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Can I be covered by both Medicare and Medicaid?
Yes, you can have both Medicare and Medicaid if you're eligible for both programs. This usually means you're a senior who has a low income. This is called being dual eligible.
When you're dual eligible, you can have either Original Medicare or a type of Medicare Advantage plan called a Special Needs Plan which is designed for those who have both Medicare and Medicaid.
Other ways to save if you have Medicare and Medicaid
If you have Medicare and are only eligible for partial Medicaid benefits, you can also apply for other ways to save such as the Medicare Savings Programs or the Extra Help program.
These programs are especially useful if you live in one of the 10 states where it's difficult to qualify for Medicaid because they haven't expanded eligibility.
Income limits for other ways to reduce Medicare costs
Program | Single person limit | Couple limit |
|---|---|---|
| Qualified Medicare Beneficiary (QMB) | $15,300 | $20,688 |
| Specified Low-Income Medicare Beneficiary (SLMB) | $18,312 | $24,768 |
| Qualifying Individual (QI) | $20,580 | $27,840 |
| Qualified Disabled and Working Individual (QDWI) | $61,260 | $82,788 |
The programs also typically have limits on how much money you can have in the bank, investments or a retirement account.
What is Medicare?
Medicare is health insurance from the federal government for people who are over the age of 65. You might also qualify if you have a disability or illness like Lou Gehrig's disease (ALS) or kidney failure ESRD). Eligibility for Medicare is not based on your income.
It's almost always cheaper to get Medicare than to buy a typical health insurance plan because health insurance is more expensive the older you are.
With Medicare, you'll get free hospital insurance through Medicare Part A. This is because you paid into the Medicare program when you were working through the Medicare tax. You'll most likely pay $174.70 per month for Part B, which covers doctor visits. But if you earn more than $103,000 as a single person or $206,000 as a couple in 2024, you'll pay more for Part B.
Original Medicare, which is Part A and Part B, is the backbone of the program. To get coverage for prescription medications, consider adding a Part D plan.
If you want more coverage, adding a Medicare Supplement plan means most of your medical bills will be completely covered. You can also get a Medicare Advantage plan, which rolls Parts A, B and usually D into one plan.
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What is Medicaid?
Medicaid is health insurance to those who have a low income. The coverage comes from the federal government and state governments. Medicaid eligibility varies by state.
Most states have expanded their Medicaid programs to cover people who make up to $20,783 and a family of four with an income up to $43,056.
Medicaid income limit in most states
Household size | Max. income to qualify |
|---|---|
| 1 | $20,783 |
| 2 | $28,207 |
| 3 | $35,632 |
| 4 | $43,056 |
Income limits are higher in Alaska and Hawaii, and they're lower in states that haven't expanded Medicaid (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin and Wyoming).
The more people you have in your household, the more you can earn and still qualify for Medicaid.
Cost of Medicaid: Usually free or a few dollars per month (varies by state)
Medicaid income limits can also be different based on your health, such as having a disability or being pregnant. If you have high medical expenses, you may qualify through the Medicaid spend down program.
Find out if you qualify for Medicaid by using the Medicaid calculator on HealthCare.gov or by applying directly through your state.
Frequently asked questions
What is the difference between Medicare and Medicaid?
Medicare and Medicaid are health insurance for different groups of people. Medicaid is for people with low incomes. Medicare is for people 65 and older. Younger people who have a disability, Lou Gehrig's disease or kidney failure also qualify. You can qualify for both Medicare and Medicaid if you meet the eligibility criteria for both programs.
How do you qualify for both Medicare and Medicaid?
To be dual eligible for both Medicare and Medicaid, you have to meet the income limit of your state's Medicaid program while also qualifying for Medicare. This usually means you have to have a low income and be over 65 or have a qualifying illness.
What's covered by Medicaid vs. Medicare?
Medicaid and Original Medicare both cover hospital stays and doctor visits. But Medicaid's coverage is usually better because it automatically covers prescription drugs and long-term care. States can choose to cover more, too, like dental care for adults. In contrast, Medicare coverage is determined by the plan you choose, and your benefits usually won't be as good as with Medicaid.
How many people are enrolled in Medicaid vs. Medicare?
There are 65 million people enrolled in Medicare. There are 88 million people enrolled in either Medicaid or CHIP, the Children's Health Insurance Program. About 19% of those with Medicare also have Medicaid, which is called being dual-eligible.
Sources
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