Medicare vs. Medicaid: What You Need to Know

Medicare vs. Medicaid - they’re two separate healthcare programs. Find out about key differences.

Understand Medicare vs. Medicaid to get maximum benefits

Medicare and Medicaid can be confusing, partly because the names sound so similar.

But they’re two very different government healthcare programs.

Medicare focuses on adults age 65 and older and Medicaid focuses on low-income individuals and families. The benefits, costs, and eligibility requirements are different for each program.

Neither program has automatic enrollment so it’s important to understand what each one offers.

Knowing which to apply for helps maximize your older adult’s healthcare benefits.

We explain the two key differences between Medicare and Medicaid, share five essential facts about each program, and explain what’s covered when people are eligible for both Medicare and Medicaid.


Medicare vs. Medicaid: 2 key differences

The first and biggest difference between Medicare and Medicaid is who’s eligible for each program.

Because of the different eligibility rules, some people who qualify for Medicaid won’t qualify for Medicare and vice versa.

The second key difference is that Medicaid covers long term care services and support. In fact, Medicaid is the nation’s largest single source of long-term care funding.

If it’s deemed medically necessary, Medicaid can cover the cost of nursing homes, assisted living communities, and other long-term care alternatives.

Generally, Medicare only covers short term stays in skilled nursing facilities after a hospitalization.


5 essential Medicare facts

1. What is Medicare?
Medicare is an insurance program that’s available to U.S. citizens over age 65, regardless of income.

If someone is covered by Medicare, their medical bills are paid from trust funds that they’ve previously paid into through Medicare payroll taxes.

2. Who qualifies for Medicare?
Anyone age 65 or older with a qualifying work history (their own or their spouse’s) is eligible for Medicare.

Most people who’ve worked for 10 years at a job in which they paid Medicare taxes will qualify. Younger people with certain disabilities or end-stage renal disease may also qualify.

3. Who runs Medicare?
The federal government.

4. What does Medicare cover?
Medicare is available through a 4-part program. The coverage depends on the plans selected.

The 4-part program includes:

  • Part A: Hospitalization – inpatient care and services received at a hospital or skilled nursing facility
  • Part B: Medical insurance – outpatient doctor visits, care, and services and some preventive care
  • Part C: Medicare Advantage plans – privately purchased supplemental insurance with additional services and often combine Part A, Part B, and Part D into one plan
  • Part D: Prescription drugs

5. How much does Medicare cost?
The cost of Medicare depends on the chosen plans and coverage. Costs typically include premiums, deductibles, copays, and coinsurance.

The premium for Part A is free for people or their spouses who have worked at least 10 years and paid Medicare payroll taxes while working.

Most people pay a Part B premium.

Costs for Part C and Part D will depend on which plan is chosen.


5 essential Medicaid facts

1. What is Medicaid?
Medicaid is an assistance program that serves low-income people of every age. It helps pay for medical care and long term care.

People covered by Medicaid usually pay nothing for covered medical expenses.

2. Who qualifies for Medicaid?
Medicaid has strict eligibility requirements based on income and financial resources so not everyone can qualify.

Generally, a wide variety of people with limited income and financial resources can qualify.

That includes those who are 65 or older, living with a disability, children under 19, parents or other adults caring for a child, and some adults without dependent children. and have more information about state-by-state eligibility requirements.

3. Who runs Medicaid?
Medicaid is run by both federal and state governments within federal guidelines.

Because of this federal-state partnership, there are different Medicaid programs in each state.

That’s why people who are eligible for Medicaid in one state might not qualify in another. And the types of covered medical services could be different from state to state.

4. What does Medicaid cover?
Medicaid services are different in each state, but the federal guidelines require coverage for certain “medically necessary” services.

Benefits typically include:

  • Care and services received in a hospital or skilled nursing facility
  • Care and services received in a federally-qualified health center or rural health clinic
  • Doctor and nursing services
  • Long term care
  • Home health care for people eligible for nursing facility services
  • Laboratory services and X-rays
  • Medical and surgical dental services

Some states may include additional benefits like prescription drug coverage, optometrist services, eyeglasses, medical transportation, physical therapy, prosthetic devices and dental services. If included, people covered by Medicaid pay nothing for these covered services.

Some Medicaid benefits do overlap with Medicare, like hospital care and doctor services. But Medicaid may also offer benefits that aren’t included under Original Medicare, like personal care, optometry, and dental.

Plus, available providers (like hospitals and doctors) under Medicaid are often different than those available to people using Medicare.

5. How much does Medicaid cost?
The cost of Medicaid will depend on income and the rules in the state’s program. Certain people may be exempt from most out-of-pocket costs.

Costs may include premiums, deductibles, copays, and coinsurance.


Dual eligibility: qualifying for both Medicare and Medicaid

People who qualify for both Medicaid and Medicare Part A and/or Part B are known as “dual eligible.”

When someone is dual eligible, Medicaid will pay for Medicare costs under 4 types of Medicare Savings Programs. The amount that’s covered by Medicaid depends on income level.

For example, if someone has both Medicare and full Medicaid coverage, their health care costs are usually fully covered, including prescription drugs – they won’t have to pay anything out-of-pocket.


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By DailyCaring Editorial Team


This article wasn’t sponsored and doesn’t contain affiliate links. For more information, see How We Make Money.


  • Reply February 6, 2022

    Aleyda Perry

    I’m taking care my husband who is 78 years. He has Dementia who keep him being able to talk, walk , perform task and loss memory. I would like to keep him at home as long as I can. I would like to know if there are any way of support that I can get with finances. I am 70 years. I would like to hear from you. Thank you

  • Reply December 2, 2020

    Bernita Ardrey

    This is all a lot of help, but I am on regular Medicare and wonder if I can get the advantage plan also. I could use the help with hearing aids & dental expense. I am thinking I might be eligible for Medicaid but not sure. Can I get help at a Medicare office or other person.

  • Reply August 6, 2020

    Rosie Bormann

    Would my father who is 91 be eligible for both Medicare and Medicaid? How can I apply for both for him? My mother is deceased and he only receives Social Security monthly. We do not want to place him in a nursing home and wish to keep him at home as long as we can. He is currently on Medicaid Advantage. I will also call the number on his Medicaid Advantage card but will wait to hear from you. Thank you

    • Reply August 17, 2020


      To find out if your father qualifies for both Medicaid and Medicare, check and to get more information about his state’s eligibility requirements.

      For advice specific to his situation, you may also want to contact the local SHIP (State Health Insurance and Assistance Programs) office. These are state-run counseling programs are available so you can get help with Medicare questions for free.

      Get more info and contact info for SHIP offices in this article – Get Help with Medicare Questions from State Programs

  • Reply July 25, 2020

    carol v Leford

    I’m taking care of my sister who is 78 yrs she has parkison which keeps her from being able to move its a great strain on me. I would like to know if there are any means of support that I can get with finances. please respond. Thank You

  • Reply October 10, 2018


    There’s been stipulations about Medicare covering Homecare Services probably in 2019. Can readers get a status on this as soon as the facts are available?

    • Reply October 10, 2018


      There was a change in the law that will allow Medicare Advantage plans to offer additional benefits including adult day care programs, home aides to help with activities of daily living like bathing and dressing, palliative care at home for some patients, home safety devices and modifications like grab bars and wheelchair ramps, and transportation to medical appointments. What actually will or won’t be offered will be up to individual insurers so the only way to know is to review their 2019 plans.

      Here’s some additional info that may be helpful —

  • Reply June 21, 2017

    Marathon John D Gaffney

    I think Medicare NEEDS to cover 100% of ALL medical costs INSTEAD of 80/20%!!! There s to many PLANS(Part A;B/&D) & nobody knows What Plan covers What;It Needs to b made simpler!!!!

    • Reply June 21, 2017

      We understand how you feel. Medical bills are a major challenge for most families and the Medicare & Medicaid systems certainly need to be improved and made easier to understand 🙁

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