Medicare vs. Medicaid: What’s the Difference?

Oct 7, 2021
What Is the Difference Between Medicare and Medicaid?

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Medicare and Medicaid are government-run health care programs meant to serve different populations:

  • Medicare is an insurance program that primarily serves people 65 and older, regardless of income.

  • Medicaid is an assistance program that provides health insurance to low-income people of all ages.

Some people get both Medicare and Medicaid. Medicaid can help pay Medicare premiums, deductibles and copays for impoverished people. Medicaid also can pay for nursing home and personal care services, expenses that aren’t typically covered by Medicare.

Medicare vs. Medicaid: Key things to know

Medicare vs. Medicaid: Eligibility

Medicare: You’re eligible once you turn 65, as long as you’re a U.S. citizen or legal permanent resident. Medicare also covers younger people with disabilities and certain diseases, including end stage renal disease (kidney failure) and Lou Gehrig’s disease or amyotrophic lateral sclerosis (ALS). People with higher incomes pay larger premiums for certain parts of Medicare, but eligibility isn’t limited by income.

Medicaid: Medicaid coverage is based on income. Medicaid is available in every state to those with incomes below the poverty line. Under the Affordable Care Act, most states have expanded Medicare eligibility to people with incomes up to 133% of the federal poverty line.

Medicare vs. Medicaid: Cost

Medicare: People who have worked 40 qualifying quarters (10 years), and their spouses or qualifying ex-spouses, pay no premiums for Medicare Part A, which covers hospitalization. But Medicare recipients typically do have out-of-pocket costs, including deductibles and copays. Medicare Part B, which covers doctor’s visits, and Part D, which covers prescriptions, also require paying premiums.

Medicaid: Medicaid is typically free. Some people may have to pay small copays. Medicaid can also make a claim against people’s assets after they die, but most people receiving Medicaid have few or no assets.

Medicare vs. Medicaid: Who runs it

Medicare: Medicare is a federal program. What’s covered and what people pay is generally the same in every state.

Medicaid: Medicaid is a state and federal program. The federal government makes the guidelines, but the program is administered by states so eligibility requirements vary.

Medicare vs. Medicaid: Dependent coverage

Medicare: Medicare usually doesn't cover dependents. The spouse or ex-spouse of someone who is eligible for coverage can also be covered by Medicare. But other dependents, including children, usually aren't covered. There are exceptions: People, including children, with end-stage renal disease or Lou Gehrig’s disease may qualify through the work history of a spouse or parent.

Medicaid: Medicaid covers dependents. Medicaid and the related Children’s Health Insurance Program provide health insurance to more than 35 million children.

The parts of Medicare

Read more about the different parts of Medicare and what they cover.

Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.