Medicare vs. Medicaid: What Is the Difference?
Medicare is federal health insurance for people 65 and older (and certain younger people with disabilities), regardless of income. Medicaid is a joint federal-state assistance program for people with limited income and resources, and it is run differently in every state. They are not competing choices — many people qualify for both, which is called being dual eligible.
The names are easy to confuse, but Medicare and Medicaid are separate programs with different rules, different funding, and different reasons you qualify. Understanding which one (or both) applies to you affects your premiums, your coverage, and your out-of-pocket costs.
This guide explains what each program does, what Medicaid covers that Medicare does not, and how the two work together for people who have both.
Side-by-Side Comparison
| Feature | Medicare | Medicaid |
|---|---|---|
| Type of program | Federal health insurance | Joint federal-state assistance |
| Why you qualify | Age 65+ or disability (any income) | Limited income and resources (need-based) |
| Administered by | Federal government (CMS) | Each state, under federal rules |
| Monthly premium | Part B premium (higher for high earners via IRMAA) | Usually none |
| Prescription drugs | Through Part D | Covered by the state plan |
| Long-term custodial care | Not covered | Covered if you qualify |
| Can you have both? | Yes — "dual eligible" | Yes — "dual eligible" |
What Medicare is
Medicare is the federal health insurance program for people 65 and older, as well as certain younger people with disabilities or End-Stage Renal Disease. You generally qualify based on age or disability, not income, and most people pay a monthly Part B premium (higher earners pay an income-related surcharge called IRMAA).
Medicare has Part A (hospital), Part B (medical), Part C (Medicare Advantage), and Part D (prescription drugs). It is the same program nationwide.
What Medicaid is
Medicaid is a joint federal and state program that helps cover health costs for people with limited income and resources. Unlike Medicare, eligibility is need-based, and each state runs its own program with its own name, rules, and income limits — which is why Medicaid looks different depending on where you live.
Medicaid often has little or no premium and can cover services Medicare does not, most notably long-term custodial care in a nursing home.
Having both: dual eligibility
Many people qualify for both programs at the same time and are called "dual eligible." When you have both, Medicare pays first and Medicaid helps with costs Medicare leaves behind, such as premiums, deductibles, and coinsurance, through Medicare Savings Programs.
Qualifying for full Medicaid or a Medicare Savings Program also automatically enrolls you in Extra Help, which lowers your Part D drug costs. Some dual-eligible beneficiaries can enroll in a Dual Eligible Special Needs Plan (D-SNP) built to coordinate both programs.
Which Option Is Right for You?
Best for
You rely on Medicare if you:
- Are 65 or older, or qualify through a disability
- Want coverage that travels with you nationwide
- Are choosing between Original Medicare, Medigap, and Medicare Advantage
Best for
Medicaid may also help if you:
- Have limited income and resources
- Need help paying Medicare premiums or cost-sharing
- May need long-term custodial care that Medicare does not cover
- Want the lower drug costs that come with Extra Help
Frequently Asked Questions
Can you have both Medicare and Medicaid?
Yes. People who qualify for both are called dual eligible. Medicare pays first, and Medicaid helps with costs Medicare does not cover, such as premiums, deductibles, coinsurance, and long-term custodial care.
Does Medicaid pay my Medicare premiums?
It can. Through Medicare Savings Programs, your state Medicaid agency may pay your Part B premium and other cost-sharing if your income and resources are below the limits. Qualifying also enrolls you in Extra Help for prescription drugs.
What does Medicaid cover that Medicare does not?
The biggest example is long-term custodial care, such as an extended nursing home stay, which Medicare generally does not cover. Medicaid may also cover additional services and reduce or eliminate premiums and cost-sharing for those who qualify.
Not Sure Which Programs You Qualify For?
A licensed advisor can check whether you qualify for Medicaid, a Medicare Savings Program, or Extra Help — and how they work with your Medicare. Free, no obligation.