The Core Difference: Who Runs It and Who It Covers

Medicare is a federal program run by the Centers for Medicare & Medicaid Services (CMS). You become covered when you turn 65, regardless of income — or earlier if you have been receiving Social Security Disability Insurance (SSDI) for 24 months, or if you have end-stage renal disease or ALS. You paid into Medicare through payroll taxes during your working years, and those payments fund your coverage now.

Medicaid is a joint federal and state program. Each state runs its own Medicaid program within federal guidelines, which means coverage rules, income limits, and what is covered vary significantly by state. Medicaid covers people of any age whose income and assets fall below their state's threshold. You do not need a work history to may have access to.

The simplest way to remember the difference: Medicare is based on age or disability and is the same nationwide. Medicaid is based on income and varies by state.

Key Takeaways

  • Medicare covers most people at age 65 and is the same in every state, while Medicaid covers low-income people of any age and rules differ by state.
  • Medicare has four parts (A, B, C, D) with specific coverage areas; Medicaid covers what your state decides, but typically includes doctor visits, hospital care, and prescriptions.
  • You pay Medicare premiums, deductibles, and copays based on which parts you choose; Medicaid costs little or nothing, depending on your state and income.
  • Some people may have access to for both programs at the same time — called "dual may be able to access" — and should understand how they work together.
  • Your state Medicaid office, not Medicare, determines Medicaid coverage; your local Social Security office or Medicare.gov handles Medicare questions.

What Medicare Covers in Four Parts

Part A covers hospital stays, skilled nursing facility care (up to 100 days per benefit period), hospice, and some home health care. There is no premium if you or your spouse paid Medicare taxes for at least 10 years. You pay a deductible when you enter the hospital.

Part B covers doctor visits, outpatient care, lab tests, X-rays, and some preventive services. The monthly premium is deducted from your Social Security check. You pay a deductible and then 20% of the cost for most services after that.

Part D covers prescription drugs. You choose a plan from private insurers approved by Medicare. Each plan has a different list of covered drugs, so comparing plans matters. You pay a monthly premium and copays for each prescription.

Part C (Medicare Advantage) is an alternative to Parts A, B, and D. Private insurers offer these plans, which bundle hospital, doctor, and drug coverage into one plan. Costs and coverage vary by plan and by insurer.

What Medicaid Covers by State

Medicaid must cover certain services in every state: doctor visits, hospital care, emergency services, lab tests, X-rays, and nursing facility care. Most states also cover prescription drugs, mental health services, and dental care, but the scope and limits vary.

Some states cover more than others. For example, some states cover vision care and hearing aids; others do not. Some states cover physical therapy with no limit; others cap it at a certain number of visits per year. Your state Medicaid office publishes what is covered in your state — usually on the state health department website.

Medicaid also covers long-term care in a nursing home or assisted living, which Medicare does not. This is one reason some seniors stay on Medicaid even after turning 65 if they may have access to for both programs.

How Much You Pay: Premiums, Deductibles, and Copays

Medicare Part A has no premium for most people, but you pay a deductible ($1,632 in 2024, though this amount changes yearly). Part B has a monthly premium (around $174.70 in 2024 for most people, higher if your income is above a certain level). Part D premiums vary by plan, typically $7 to $100 per month. You also pay copays when you use services — usually $20 to $50 per doctor visit, depending on your plan.

Medicaid costs vary by state. Some states charge no premium or copay. Others charge small copays ($1 to $5 per visit) for people above a certain income level. A few states charge monthly premiums for Medicaid coverage. Contact your state Medicaid office to learn what you would pay.

Medicare has an annual out-of-pocket limit. Once you spend a certain amount in a year, Medicare covers 100% of most services for the rest of that year. Medicaid does not have a yearly limit in most states.

When You may have access to for Both: Dual may be able to access Coverage

If you are 65 or older and your income is low enough to may have access to for Medicaid in your state, you may be dual may be able to access — covered by both Medicare and Medicaid at the same time. This is common and not a problem; the programs are designed to work together.

When you are dual may be able to access, Medicare is your primary payer. It covers what it covers first. Medicaid then covers what Medicare does not — including Medicare premiums, deductibles, and copays. Medicaid also covers services Medicare does not, like long-term nursing home care and dental work (in states that cover it).

If you think you might may have access to for Medicaid, contact your state Medicaid office. They will tell you the income and asset limits for your state and whether you may have access to. You do not lose Medicare by gaining Medicaid; you straightforward have both.

How to Enroll and Where to Get Help

You enroll in Medicare automatically at 65 if you are already receiving Social Security. If you are not, you must sign up at your local Social Security office, online at Medicare.gov, or by calling 1-800-MEDICARE. There are penalties if you delay enrollment without a good reason, so do not wait.

For Medicaid, contact your state Medicaid office directly. Each state has a different name for its program — it might be called "Medicaid", "Medical information", "Medi-Cal" (California), or something else. Your state health department website will have the phone number and online portal. You can also call 211 and ask for the Medicaid office in your area.

If you need help understanding your options, your State Health Insurance information Program (SHIP) offers free counseling. Find your local SHIP at shiptalk.org or call 1-877-839-2675. SHIP counselors can explain Medicare and Medicaid in your state and help you understand what you would pay.

Common Situations and What Happens Next

If you turn 65 and have employer health insurance through your job, you can keep working and delay Medicare without penalty — but only if your employer has 20 or more employees. If your employer is smaller, you must enroll in Medicare when you turn 65 or face a penalty.

If you are on Medicaid now and turn 65, you do not automatically lose Medicaid. You will gain Medicare, and Medicaid will continue to cover what Medicare does not. Your state Medicaid office will contact you about this transition.

If you are receiving SSDI and turn 65, your SSDI automatically converts to Social Security retirement benefits at the same amount. Your Medicare coverage continues without interruption.

Frequently Asked Questions

Can I have both Medicare and Medicaid at the same time?

Yes. If you are 65 or older and your income is low enough, you can have both. Medicare pays first, then Medicaid covers what Medicare does not. This is called being "dual may be able to access" and is common.

Does Medicare cover nursing home care?

Medicare covers up to 100 days in a skilled nursing facility per benefit period, but only after a hospital stay of at least three days. It does not cover long-term custodial care in a nursing home. Medicaid does cover long-term nursing home care if you meet income and asset limits.

What if I cannot afford Medicare premiums?

If your income is low, you may may have access to for Medicaid, which can pay your Medicare premiums. You can also ask about the Medicare Savings Program in your state, which helps pay premiums and copays for people with limited income. Contact your state Medicaid office.

Do I have to choose a Medicare Advantage plan, or can I stick with Original Medicare?

You can choose either. Original Medicare (Parts A and B) is available to everyone at 65. Medicare Advantage (Part C) is optional and offered by private insurers. You can switch between them during the annual enrollment period each fall.

How do I know what my state Medicaid covers?

Your state Medicaid office publishes a handbook or guide listing covered services. You can also call your state Medicaid office or visit the state health department website. Each state is different, so do not assume coverage based on another state's rules.