Medicaid vs. Medicare: What’s the Difference?

Medicare is health insurance for people 65 or older or people with certain disabilities. Medicaid is health insurance for people with limited incomes.

Kim Porter
Written byKim Porter
Kim Porter
Kim Porter
  • Co-authored the book “Future Millionaires’ Guidebook”

  • 13 years writing personal finance content

A former chief copy editor at Bankrate and past managing editor at Macmillan, Kim specializes in writing easy-to-understand, actionable personal finance content.

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Ashley Cox
Edited byAshley Cox
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Ashley CoxSenior Managing Editor
  • 7+ years in content creation and management

  • 5+ years in insurance and personal finance content

Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.

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Updated June 13, 2024

Reading time: 4 minutes

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Medicare is a federal health insurance program mostly geared toward adults age 65 and older, while Medicaid is a joint federal and state program that offers healthcare coverage for low-income families and individuals. If you’re approaching retirement age or you’re looking for affordable coverage, understanding how each program works can help you determine your options.

Learn about the key differences between these programs so you can make an informed decision about your healthcare coverage.

What is Medicaid?

Medicaid is a joint federal and state government program that covers medical expenses for low-income children, some seniors, pregnant women, and people with disabilities.[1] Each state runs its own Medicaid program, so it can broadly determine who qualifies, which services to include, how to deliver care, and how much to reimburse providers.

States also must follow rules set by the federal government. For example, every Medicaid plan includes basic benefits like inpatient and outpatient hospital care, labs, physician services, X-rays, and home health services.

State governments may also choose to include additional benefits, such as prescription drug coverage, dental care, occupational therapy, and physical therapy.[2]

Who qualifies for Medicaid

Medicaid eligibility requirements depend mostly on income and family size. A person generally qualifies for Medicaid if their income falls below the federal poverty level (FPL), though most states have expanded eligibility under the Affordable Care Act.

People in 40 states and Washington, D.C., may now qualify for Medicaid with incomes of up to 138% of the FPL ($20,783 in 2024).[3]

Children’s Health Insurance Program

Even if your income is too high for Medicaid, your child could still be eligible for the Children’s Health Insurance Program (CHIP). This program pays for medical and dental care for children and teens without insurance up to age 19. CHIP eligibility varies by state. You can find out whether or not your child is eligible by visiting the InsureKidsNow website.

How to enroll in Medicaid

You may enroll in Medicaid any time of the year by visiting your state’s Medicaid agency. Or you can create an account with the health insurance marketplace.

If you qualify for Medicaid based on the answers in your application, the system forwards your information to the state agency. A representative from the agency will then contact you about enrolling.[4]

Learn More: When Does Health Insurance Expire After Leaving a Job?

Learn More: When Does Health Insurance Expire After Leaving a Job?

What is Medicare?

Medicare is a federal health insurance program for people age 65 and older and some people with disabilities. The federal government funds the program using revenue from payroll taxes, policy premiums, and other revenue sources.

Medicare has four parts that each offer specific coverage:[5]

  • Medicare Part A is known as hospital insurance because it covers inpatient hospital care and related services.

  • Medicare Part B is also known as medical insurance. It covers outpatient medical services such as doctor appointments, preventive care, and medical equipment.

  • Medicare Part C is a private insurance option known as Medicare Advantage. Private insurance companies sell these plans, which may include more benefits than Parts A and B.

  • Medicare Part D will help cover the cost of prescription drugs and vaccines.

Who qualifies for Medicare?

Anyone who’s at least 65 years old generally qualifies for Medicare coverage. You may be able to get Medicare at an earlier age if you have a disability, end-stage renal disease, or amyotrophic lateral sclerosis (ALS).[6]

How to apply for Medicare

When you apply for Social Security benefits, you’re also signing up for Medicare coverage. The Social Security Administration reviews your application and checks whether you need to pay a premium for Part A. The agency can automatically enroll you in Part A and will ask whether you’d like Part B coverage, too.

Read More: 5 of the Best Sites to Compare Medicare

Read More: 5 of the Best Sites to Compare Medicare

Medicaid vs. Medicare coverage differences

The main difference between Medicaid and Medicare is that each program covers different groups of people. Medicare is a federal program that generally insures people who are 65 and older and people with certain disabilities, while Medicaid is a joint state and federal program that typically pays medical costs for some people with limited incomes and resources.

Here are some examples of what Medicare covers:[7]

  • Inpatient hospital care

  • Skilled nursing care

  • Hospice care

  • Lab tests

  • Surgery costs

  • Home healthcare

  • Outpatient services 

  • Physician visits 

  • Durable medical equipment

  • Some preventive services

  • Prescriptions 

Here are some examples of what Medicaid covers:[8]

  • Long-term care

  • Transportation to medical care

  • Inpatient and outpatient hospital services

  • Laboratory and X-ray services

  • Nursing facility services

  • Doctor visits

  • Home health services

  • Certified pediatric and family nurse practitioner services

Medicaid vs. Medicare cost differences

Most states don’t charge premiums for Medicaid coverage. But some states may require recipients to share in the costs of some services, such as non-preventive doctor visits, non emergency visits to an emergency room, inpatient hospital visits, and prescription medications.

Medicare premiums depend on which parts you’re enrolled in and how long you (or your spouse) worked and paid Medicare taxes. For 2024, the monthly Medicare premiums are:[9][10]

  • Part A premium: $0 if you paid Medicare taxes long enough while working, which is usually at least 10 years. If you pay a premium, it’ll be either $278 or $505 per month.

  • Part B premium: $174.70 or more per month, depending on your income.

  • Part C premium: Varies by the Medicare Advantage plan and the private insurance company you choose.

  • Part D premium: Varies depending on which plan you choose, but the average is around $56 per month.

What is dual coverage, and how does it work?

Dual coverage means you have coverage from both Medicare and Medicaid programs. You may qualify for simultaneous coverage under Medicare and Medicaid based on your age, health status, and financial circumstances.

When you have dual coverage, Medicare kicks in first and pays for any covered services. Then Medicaid pays any remaining costs. As a result, you usually won’t have any out-of-pocket healthcare costs.

Keep Reading: How Does COBRA Work?

Keep Reading: How Does COBRA Work?

Medicaid vs. Medicare FAQs

Check out this additional information about Medicare and Medicaid below. If you have more questions, please consult an experienced healthcare provider or insurance advisor.

  • What’s the highest income to qualify for Medicaid?

    The highest income to qualify depends on your state’s Medicaid limit.

  • What doesn’t Medicare cover?

    Medicare doesn’t cover certain benefits like long-term care, dental care, eye exams, dentures, cosmetic surgery, massage therapy, routine physical exams, and hearing aids.

    If your Medicare plan doesn’t cover a service you need, you may need to pay for it yourself or buy supplemental coverage, such as a Medicare Advantage plan.

  • How much does Medicare cost at age 65?

    The cost of a Medicare policy depends on factors like your income, whether you paid Medicare taxes long enough while working, the prescription drug plan you choose, and whether you enroll in a Medicare Advantage plan.

  • Who’s not eligible for Medicare?

    You likely won’t qualify for Medicare if you’re younger than 65 and you don’t have a disability, end-stage renal disease, or Lou Gehrig’s disease.


  1. U.S. Department of Health and Human Services. "What is the Medicaid program?."
  2. "Benefits."
  3. Kaiser Family Foundation. "Status of State Medicaid Expansion Decisions: Interactive Map."
  4. "How to apply for Medicaid and CHIP."
  5. "Parts of Medicare."
  6. U.S. Department of Health and Human Services. "Medicare and Medicaid."
  7. "What Medicare covers."
  8. "This page outlines mandatory and optional Medicaid state plan benefits and the relevant section of the Social Security Act and applicable coverage regulation(s) under which each benefit is authorized. States are required to provide all mandatory benefits under federal law. States may provide optional benefits if they choose to add them through the state plan process. Mandatory Benefits Transportation to medical care (1902(a)(4), 42 CFR 431.53 and 42 CFR 440.170) Inpatient hospital services (1905(a)(1), 42 CFR 440.10) Outpatient hospital services (1905(a)(2)(A), CFR 440.20(a)) Rural health clinic services (1905(a)(2)(B), 42 CFR 440.20(b)) Federally qualified health center services (1905(a)(2)(C)) Laboratory and X-ray services (1905(a)(3), 42 CFR 440.30, and 42 CFR 441.17) Nursing facility services (1905(a)(4)(A), 42 CFR 440.40 and 42 CFR 440.155) Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services (1905(a)(4)(B), 1905(r), 42 CFR 440.40, 42 CFR 441 Subpart B) Family planning services (1905(a)(4)(C), 42 CFR 441.20) Tobacco cessation counseling for pregnant women (1905(a)(4)(D)) Physician services (1905(a)(5), 42 CFR 440.50) Home health services (1905(a)(7), 42 CFR 440.70 and 42 CFR 441.15) Nurse Midwife services (1905(a)(17), 42 CFR 440.165 and 42 CFR 441.21) Certified pediatric and family nurse practitioner services (1905(a)(21), 42 CFR 440.166(b) and 42 CFR 441.22) Freestanding birth center services when licensed or otherwise recognized by the state (1905(a)(28)) Medication Assisted Treatment (MAT) (1905(a)(29)) Routine patient costs of items and services for beneficiaries enrolled in qualifying clinical trials (1905(a)(30)) Optional Benefits Other licensed practitioner services (1905(a)(6), 42 CFR 440.60) Private duty nursing services (1905(a)(8), 42 CFR 440.80) Clinic services (1905(a)(9), 42 CFR 440.90) Dental services (1905(a)(10), 42 CFR 440.100) Physical therapy (1905(a)(11), 42 CFR 440.110(a)) Occupational therapy (1905(a)(11), 42 CFR 440.110(b)) Speech, hearing and language disorder services (1905(a)(11), 42 CFR 440.110(c)) Prescription drugs (1905(a)(12), 42 CFR 440.120(a) and 42 CFR 441.25) Dentures (1905(a)(12), 42 CFR 440.120(b)) Prosthetics (1905(a)(12), 42 CFR 440.120(c)) Eyeglasses (1905(a)(12), 42 CFR 440.120(d)) Other diagnostic, screening, preventive, and rehabilitative services (1905(a)(13), 42 CFR 440.130) Services for individuals age 65 or older in an Institution for Mental Disease (IMD) (1905(a)(14), 42 CFR 440.140) Services in an intermediate care facility for Individuals with intellectual disability (1905(a)(15), 42 CFR 440.150) Inpatient psychiatric services for individuals under age 21 (1905(a)(16), 42 CFR 440.160 and 441 Subpart D) Hospice (1905(a)(18)) Case management (1905(a)(19), 42 CFR 440.169 and 42 CFR 441.18) TB-related services (1905(a)(19)) Respiratory care for ventilator-dependent individuals (1905(a)(20), 42 CFR 440.185) Personal care (1905(a)(24), 42 CFR 440.167) Primary care case management (1905(a)(25), 42 CFR 440.168) Primary and secondary medical strategies, treatment, and services for individuals with sickle cell disease (1905(a)(27)) State plan home and community based services (1915(i), 42 CFR 440.182) Self-directed personal assistance services (1915(j), 42 CFR 441.450-441.484) Community First Choice Option (CFC) (1915(k), 42 CFR 441.500-590) Alternative Benefit Plan (ABP) (1937,* 42 CFR 440.300) Health homes for enrollees with chronic conditions (1945) Other services approved by the Secretary** *The ABP is mandatory for the Medicaid expansion population. **This includes services furnished in a religious nonmedical health care institution, emergency hospital services by a non-Medicare certified hospital, and critical access hospital (CAH). Mandatory & Optional Medicaid Benefits."
  9. Centers for Medicare & Medicaid Services. "2024 Medicare Parts A & B Premiums and Deductibles."
  10. National Council on Aging. "What Are Medicare Part D Costs in 2024?."
Kim Porter
Kim Porter

Kim Porter is a writer and editor who's been creating personal finance content since 2010. Before transitioning to full-time freelance writing in 2018, Kim was the chief copy editor at Bankrate, a managing editor at Macmillan, and co-author of the personal finance book "Future Millionaires' Guidebook." Her work has appeared in AARP's print magazine and on sites such as U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, and more. Kim loves to bake and exercise in her free time, and she plans to run a half marathon on each continent.

Ashley Cox
Edited byAshley CoxSenior Managing Editor
Headshot of Managing Editor Ashley Cox
Ashley CoxSenior Managing Editor
  • 7+ years in content creation and management

  • 5+ years in insurance and personal finance content

Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.

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