Medicare vs. Medicaid: What's the Difference?

Medicare and Medicaid are two separate programs that help cover health care costs and medical expenses. While Medicare is for all American individuals over 65 years of age, Medicaid is for those with financial need. Each program may also apply to individuals with specific disabilities.

You will be automatically enrolled in Medicare Parts A and B when you turn 65 unless you choose to delay enrollment, for example because you are still covered by your company's health insurance plan. In contrast, you have to apply for Medicaid if you want coverage and believe you are eligible.

Recent expansions of Medicaid under the Affordable Care Act have extended eligibility to low-income individuals in many states, even if they did not previously qualify.

Medicare

Medicare is federal public health insurance coverage for seniors or people who have certain disabilities.

Medicare parts A, B, and D cover what is commonly thought of as health insurance, including doctor visits, hospital stays and some prescription medications.

Most people are automatically enrolled in Medicare Parts A and B when they turn 65. To determine if you qualify early due to disability, contact your local Social Security office.

While you can enroll in Medicaid at any point when you meet the requirements, you can enroll in Medicare only during enrollment periods: when you turn 65, the annual general enrollment period after you turn 65, or during a special enrollment period you will get if you lose employer coverage after age 65.

Medicaid

Medicaid is a joint federal and state public assistance program designed for low-income individuals, children, pregnant women, parents, seniors and people with certain disabilities. Income requirements for eligibility vary by state, and in some states, adults who are not members of the previously mentioned categories may still qualify.

Each state creates its own Medicaid program with its own eligibility requirements and coverage, but the federal government sets requirements for certain services that must be covered, including:

  • Hospital services
  • Nursing home and home health care
  • X-rays and lab diagnostics
  • Transportation for medical care
  • Pediatrician visits

If you are eligible, you can enroll in Medicaid at any point in the year, and do not need to wait for an open enrollment period.

In all states, you can qualify for Medicaid based on a combination of income, family size, disability, pregnancy and other factors.

Your state has a maximum income for patients who qualify for Medicaid on the basis of income, generally based on the Federal Poverty Level. If you spend a significant amount of your income on health care, you may also qualify for Medicaid on the basis of being considered "medically needy." To find out if your medical expenses are high enough, or your income is low enough to qualify, you can contact your regional Medicaid office.

Under the ACA, many states have expanded Medicaid to allow individuals to qualify for Medicaid on income alone, without needing other factors to qualify. You can find out more about qualifying for Medicaid in your state at the U.S. Centers for Medicare & Medicaid Services website.

Can you be eligible for Medicare and Medicaid?

Yes! This is known as dual eligibility. When you are dual eligible, Medicare pays your health care providers first, and then Medicaid pays remaining expenses, often covering most of the total health care cost.

If you have a limited income, dual Medicare and Medicaid coverage may offer better coverage with lower out-of-pocket costs for you than Medicare Parts A and B and a separately purchased prescription drug plan, and may be significantly more affordable than a Medicare Advantage plan.

Dual coverage often offers benefits not covered by Medicare Parts A and B, including hearing exams, vision coverage, and dental benefits. Dual coverage may even cover transportation for medical appointments. Medicaid offers more nursing home coverage than Medicare, and seniors who qualify for dual eligibility may receive better coverage for long-term care.

If you are dual eligible, you will most likely get a letter from your state's Medicaid office. If you think you should be eligible for Medicare and Medicaid together, but have not received a letter, you can contact your state's Medicaid office to find out your status.

For more information about dual eligibility programs, you can call Social Security toll-free at 800-772-1213, TTY 800-325-0778, or call your state's Medicaid office.