The short answer to the difference between Medicare and Medicaid is this: Medicare is federal health coverage you earn mostly by turning 65 or by having a qualifying disability, and Medicaid is a state and federal program that helps people with limited income pay for care. They sound alike and the names get mixed up all the time, but they do different jobs. Some people qualify for only one. A lot of people qualify for both, and when you have both, they work together to cover far more than either one does alone.
If you already have one and you are wondering whether you might get the other, that is worth checking. Having both can open the door to a single plan that combines them, often with a $0 monthly premium and extra help with groceries, over the counter items, dental, and rides to the doctor, if you qualify.
What is the difference between Medicare and Medicaid at a glance
Here is the plainest way to hold the two apart. Medicare is tied to age and work history. Medicaid is tied to income and need. That single idea explains most of the difference between Medicare and Medicaid.
Medicare is run by the federal government, so the rules are the same whether you live in Florida, New York, or Texas. You generally become eligible when you turn 65. You can also qualify younger if you have a qualifying disability, or certain conditions like end stage renal disease. Medicare is not based on how much money you make. A wealthy person and a person on a fixed income both qualify at 65.
Medicaid works differently. It is run by each state along with the federal government, so the income limits and some of the benefits change depending on where you live. It is built for people with limited income and resources, and it covers children, pregnant women, adults, seniors, and people with disabilities. Because states set their own thresholds, the exact cutoff to qualify in your state may not match your neighbor’s state.
What each program actually covers
The two programs cover different slices of your care, and that is where having both really pays off.
Medicare is split into parts. Part A helps with hospital stays. Part B helps with doctor visits and outpatient care. Part D helps with prescriptions. Medicare covers a lot, but it still leaves you with premiums, deductibles, and a share of the bill on many services. One important gap: Medicare does not pay for long term nursing home care, and it only covers a short stretch of skilled nursing after a hospital stay.
Medicaid tends to fill in the places Medicare leaves open. It can help pay your Medicare costs, and it covers things Medicare usually will not, like long term care in a nursing home and personal care help at home. For someone worried about the cost of ongoing care, that difference matters a great deal.
When you have both: how they team up
When you qualify for both, you are called dual eligible. More than 12 million Americans are. If that is you, the two programs coordinate instead of competing. Medicare pays first on a covered service. Medicaid then steps in to help with what is left, which can include your Medicare premiums, deductibles, and the copays you would otherwise owe.
The result for many dual eligible people is very low out of pocket cost for their regular care. You are not choosing Medicare over Medicaid or the other way around. You keep both, and they stack.
You can read a fuller side by side breakdown on our Medicare vs Medicaid page, which lays out who pays for what in a simple table.
Where a dual special needs plan comes in
Here is the part a lot of people miss. If you have both Medicare and Medicaid, you may be able to combine them into one plan called a Dual Eligible Special Needs Plan, or DSNP. It is a type of Medicare Advantage plan built only for people who have both programs.
A dual plan rolls your coverage into a single card and a single plan to deal with. On many plans it comes with a $0 monthly premium because your Medicaid helps cover the cost. Many of these plans also add extras that neither program gives you on its own, such as an allowance for groceries and over the counter health items, dental and vision coverage, hearing help, and rides to medical appointments.
Those extras vary by plan, county, and year, so treat any dollar figure you see as a sample to confirm, not a promise. The honest way to say it is up to a set amount, if you qualify. And an important reassurance: joining a dual plan does not make you give up your Medicaid. You keep it. The plan is just a way to use both programs together more smoothly. If you want to check your own situation first, our Am I Dual Eligible page walks you through it.
Common points people get wrong
A few things trip people up again and again.
People often think Medicaid is only for young families. It is not. Millions of seniors have Medicaid alongside their Medicare, and that is exactly what makes them dual eligible.
People also assume that if they have a home or a little savings they cannot get Medicaid. The income and asset rules are set by your state and there are special categories for people who also have Medicare, so it is worth checking rather than assuming you are over the line.
And many people believe the two programs are basically the same thing with different names. They are not. Medicare is the federal, age based program. Medicaid is the state based, income based program. Knowing which one you have, or that you may have both, is the first step to getting everything you are entitled to.
Key takeaways
The difference between Medicare and Medicaid comes down to a handful of points worth remembering:
- Medicare is federal and based on age or disability, not income, and the rules are the same in every state.
- Medicaid is a state and federal program based on limited income, so the rules vary by where you live.
- Medicare covers hospital, doctor, and drug costs but leaves gaps, including long term nursing home care.
- Medicaid helps fill those gaps and can pay some of your Medicare costs.
- If you have both, you are dual eligible, and a dual plan can combine them into one $0 premium plan with extra benefits, if you qualify.
Frequently asked questions
Can you have Medicare and Medicaid at the same time? Yes. Many people do. When you have both, you are dual eligible, and the two programs work together to cover more of your care.
Which one pays first? Medicare pays first on covered services, and Medicaid helps with what is left over, such as premiums, deductibles, and copays.
If I join a dual plan, do I lose my Medicaid? No. You keep your Medicaid. A dual plan simply lets you use both programs through one plan.
Is a dual plan free? Many dual plans have a $0 monthly premium because Medicaid helps cover the cost, but plan details vary by county and year, so it is best to confirm what is offered in your area.
Not sure which one you have, or whether you have both?
That is one of the most common questions we hear, and it takes only a few minutes to sort out. If you have both Medicare and Medicaid, or you think you might, a licensed insurance agent can look at the dual plans offered in your area and tell you what you may qualify for. It is free, and there is no obligation to enroll. Call to see if you qualify.
Call (800) 000-0000My Dual Plan is a private information and referral service, not an insurance company, agency, or licensed producer. When you call, you are connected with a licensed insurance agent who can discuss the dual special needs plans they offer in your area. We are not affiliated with, endorsed by, or connected to Medicare, Medicaid, CMS, or any government agency. We do not offer every plan available in your area. Any information we provide is limited to the plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.