Medicare and Medicaid are separate federal programs with different rules, even though their names sound similar

Medicare is a federal health insurance program you become may be able to access for at age 65, regardless of income. You pay premiums, deductibles, and copays. Medicaid is a joint federal-state program that covers low-income people of any age, including seniors. Each state runs its own Medicaid program with different income limits and coverage rules.

Most seniors have Medicare because they turned 65 or became disabled. Some seniors have both Medicare and Medicaid (called "dual may be able to access"). A smaller number have only Medicaid if they did not work enough quarters to may have access to for Medicare. Understanding which program you have — and what it covers — changes what you pay out of pocket and which doctors and hospitals you can use.

The programs do not automatically coordinate. If you have both, you need to know which one pays first and what gaps remain. If you have only one, you need to know what costs it does not cover and whether you may have access to for help with those costs.

Key Takeaways

  • Medicare is available at 65 based on age or disability, while Medicaid is available at any age based on income and is run by your state.
  • Medicare Part A covers hospital stays, Part B covers doctor visits and outpatient care, Part D covers prescription drugs, and neither covers long-term care or dental.
  • Medicaid covers services Medicare does not, including long-term care, dental, and vision, but only if your income and assets fall below your state's limits.
  • If you have both programs, Medicaid usually pays Medicare premiums and covers costs Medicare does not, but you must stay in network for both.
  • You must enroll in Medicare Part B during your initial enrollment window or pay a permanent penalty, even if you delay coverage.

How Medicare Works and What It Covers

Medicare has four parts. Part A covers inpatient hospital stays, skilled nursing facility care (up to 100 days per benefit period), hospice, and some home health care. You do not pay a monthly premium for Part A if you or your spouse paid Medicare taxes for at least 10 years. Part A has a deductible ($1,676 in 2024, though this amount changes yearly) and you pay coinsurance for longer stays.

Part B covers doctor visits, outpatient surgery, diagnostic tests, physical therapy, and durable medical equipment like wheelchairs and oxygen. Part B costs a monthly premium (the standard amount is $164.90 in 2024 for people with higher incomes; lower-income seniors pay less). You also pay a yearly deductible ($240 in 2024) and then 20 percent coinsurance for most services. Part B is optional, but if you do not enroll when you turn 65, you pay a permanent 10 percent penalty on your premium for life.

Part D is prescription drug coverage. You choose a plan from private insurers, and costs vary by plan and by drug. Part D has a deductible, a coverage gap (called the "donut hole"), and a catastrophic coverage phase. If you do not enroll when you turn 65 or lose creditable coverage, you pay a permanent penalty.

Medicare does not cover dental, vision, hearing aids, long-term care (nursing home or assisted living), or most preventive care like annual physicals. It also does not cover routine foot care, cosmetic surgery, or acupuncture. Many seniors buy a Medigap policy (supplemental insurance from a private company) to cover the gaps in Parts A and B, or they enroll in a Medicare Advantage plan (Part C), which is an all-in-one alternative run by private insurers.

How Medicaid Works and What It Covers

Medicaid is jointly funded by the federal and state governments, but each state sets its own income and asset limits, decides which services to cover, and runs its own program. Because of this, what Medicaid covers in one state may differ from another. You must live in the state where you explore, and you must meet that state's income and asset thresholds.

Most states use the federal poverty level or a percentage above it to set income limits for seniors. Some states are more generous than others. For example, one state might allow a single senior to earn up to $1,500 per month, while another allows $2,500. Your state's Medicaid office can tell you the exact limit. Asset limits also vary — some states count your home and car as assets, while others exclude them.

Medicaid covers services Medicare does not: long-term care in a nursing home or assisted living facility, dental care, vision care, hearing aids, and personal care information at home. Medicaid also covers Medicare premiums, deductibles, and coinsurance for seniors who may have access to for both programs. This makes Medicaid valuable for seniors with high medical costs or limited savings.

To explore for Medicaid, contact your state's Medicaid office or your local social services department. You will need proof of income (tax returns, pay stubs, or benefit statements), proof of citizenship or legal residency, and proof of your Social Security number. Processing time varies by state, usually between 30 and 45 days.

When You Have Both Medicare and Medicaid

Seniors with both programs are called "dual may be able to access." This usually happens when someone qualifies for Medicare at 65 but has income and assets below the Medicaid threshold. Dual may be able to access seniors get significant help: Medicaid pays the Medicare Part B premium, the Part A deductible, and coinsurance costs. Medicaid also covers services Medicare does not, like long-term care and dental.

When you have both programs, Medicare pays first for covered services, and Medicaid pays what Medicare does not cover. This is called the "coordination of benefits." For example, if you see a doctor, Medicare pays 80 percent of the approved amount after you meet your deductible. Medicaid then pays your 20 percent coinsurance. You pay nothing out of pocket (in most cases).

The catch is that you must use providers who accept both Medicare and Medicaid. Some doctors accept only Medicare or only Medicaid, and some accept neither. Before scheduling an appointment, call the provider's office and confirm they take both programs. If you enroll in a Medicare Advantage plan, you cannot also use Medicaid for the same service — you must choose one or the other.

Some states offer programs specifically for dual may be able to access seniors, such as integrated care programs that coordinate Medicare and Medicaid services through a single plan. Ask your state Medicaid office whether your state has such a program and whether you may have access to.

Medicare Enrollment Windows and Penalties

Your Initial Enrollment Period is the seven-month window centered on your 65th birthday: three months before, the month you turn 65, and three months after. During this window, you can enroll in Medicare Part B and Part D without penalty. If you miss this window, you pay a permanent penalty on your Part B premium (10 percent per year you delayed) and on your Part D premium (1 percent per month you delayed).

The only exception is if you have creditable coverage — health insurance through an employer or union that is at least as good as Medicare. If you have creditable coverage when you turn 65, you can delay enrolling in Part B or Part D without penalty, as long as you enroll within eight months of losing that coverage. You must get written proof from your employer or plan that your coverage was creditable.

If you miss your Initial Enrollment Period and do not have creditable coverage, you can enroll during the General Enrollment Period (January 1 to March 31 each year), but you will pay the penalty. The penalty stays on your premium for as long as you have Medicare, even if you move to a different plan.

Part A enrollment is different: if you are not yet receiving Social Security at 65, you must enroll in Part A to avoid a penalty. If you are already receiving Social Security, you are enrolled automatically.

Costs You Should Expect With Medicare

Medicare costs include premiums, deductibles, and coinsurance. The amounts change each year. In 2024, the standard Part B premium is $164.90 per month, but higher-income seniors pay more through Income-Related Monthly Adjustment Amounts (IRMAA). If your modified adjusted gross income is above a certain threshold, your premium increases. The thresholds are based on your income from two years prior, so your 2024 premium is based on your 2022 tax return.

Part A has a deductible of $1,676 per benefit period (2024). A benefit period starts when you enter a hospital and ends 60 days after you leave. If you are readmitted within 60 days, it is the same benefit period and you do not pay another deductible. After the deductible, you pay coinsurance: $419 per day for days 61 to 90, and $838 per day for days 91 to 150 (2024 amounts).

Part B has a yearly deductible of $240 (2024) and then you pay 20 percent coinsurance for most services. Some preventive services (like cancer screenings and vaccines) have no coinsurance. Part D costs vary by plan and by drug, but all plans have a deductible, a coverage gap, and a catastrophic phase.

If you have Medicaid, it covers these costs for you. If you do not have Medicaid, consider a Medigap policy to cover coinsurance and deductibles, or a Medicare Advantage plan that caps your out-of-pocket costs.

Medicaid Income and Asset Limits by State

Medicaid income and asset limits vary significantly by state. Some states are "medically needy" states, meaning they allow higher income if you have high medical expenses. Other states use a strict income limit regardless of medical costs. A few states have not expanded Medicaid under the Affordable Care Act, so seniors under 65 may not may have access to at all.

To find your state's limits, visit your state Medicaid office website or call your local social services department. You can also call 211 (a free helpline) and ask for Medicaid information for your state. Have your income and asset information ready so the representative can give you a quick answer about whether you likely may have access to.

Income includes wages, Social Security, pensions, and interest from savings. Some states exclude a portion of Social Security income. Assets include bank accounts, stocks, and real estate (though most states exclude your primary home and one car). If you are married, some states count only your income and assets, while others count your spouse's as well.

If your income is slightly above the limit, ask about spend-down programs. Some states allow you to "spend down" excess income on medical expenses or long-term care costs, which then makes you Medicaid-may be able to access. This is especially useful if you need nursing home care and want Medicaid to pay for it.

Choosing Between Medicare Advantage and Original Medicare

When you turn 65, you choose between Original Medicare (Parts A and B) plus a separate Part D plan and possibly a Medigap policy, or a Medicare Advantage plan (Part C). Medicare Advantage plans are all-in-one alternatives run by private insurers. They include Parts A, B, and usually D in one plan.

Original Medicare lets you see any doctor or hospital that accepts Medicare. You have more freedom to choose providers. Medigap policies cover most of your out-of-pocket costs, but they cost extra (usually $100 to $300 per month). Medicare Advantage plans limit you to in-network providers (except emergencies), but they usually have lower or no premiums and capped out-of-pocket costs. The trade-off is less flexibility and more coordination requirements.

If you have Medicaid, check whether your state allows you to enroll in a Medicare Advantage plan. Some states do not, or they offer special integrated plans for dual may be able to access seniors. Ask your state Medicaid office before enrolling in Medicare Advantage.

You can switch between Original Medicare and Medicare Advantage during the Annual Enrollment Period (October 15 to December 7 each year). Changes take effect January 1. If you miss this window, you cannot switch until the next year, with limited exceptions.

Frequently Asked Questions

Do I have to enroll in Medicare at 65 if I am still working?

If you or your spouse are still working and have health insurance through your employer, you can delay enrolling in Part B without penalty. You must enroll within eight months of retiring or losing that coverage. Part A enrollment is different — you should still enroll at 65 even if you are working, because Part A has no monthly premium if you paid Medicare taxes for 10 years.

What happens if I cannot afford Medicare premiums and deductibles?

If your income is low, you may may have access to for Medicaid, which covers Medicare premiums and deductibles. You can also ask about Medicare Savings Programs, which are state-run programs that help pay Part B premiums and coinsurance for people with limited income. Contact your state Medicaid office or call 211 to learn whether you may have access to.

Can I use my Medicare at a hospital or doctor outside the United States?

Original Medicare does not cover care outside the U.S., except in limited cases (like emergency care in Canada or Mexico near the border). Medicare Advantage plans may offer limited international coverage, but you should check your plan's details. If you travel internationally regularly, consider buying supplemental travel insurance.

If I am on Medicaid, do I need to enroll in Medicare Part D?

Yes. Medicaid does not cover prescription drugs the way Part D does. You must enroll in Part D when you turn 65 or become may be able to access for Medicare, even if you have Medicaid. Medicaid will help pay the Part D premium and cost-sharing. If you do not enroll, you pay a permanent penalty on your Part D premium.

How do I know if my doctor accepts Medicare?

Call your doctor's office and ask directly. You can also search Medicare's provider directory at Medicare.gov, or call 1-800-MEDICARE. If you have a Medicare Advantage plan, use your plan's provider directory to confirm your doctor is in-network. In-network doctors have negotiated rates with your plan; out-of-network care costs more.