Medicare vs. Medicaid: What’s The Difference?

Key Takeaways

Medicare covers people 65 or older and those with certain disabilities, while Medicaid helps low-income individuals and families.

You can qualify for both Medicare and Medicaid at the same time if you're 65-plus with limited income.

Medicare requires premiums and deductibles, but Medicaid usually costs little or nothing if you qualify based on income.

What Is Medicare

When you hit 65 (or if you’re younger with certain disabilities), you’ll qualify for Medicare, the federal health insurance program. It breaks down into different parts: Part A takes care of hospital stays and nursing home care, while Part B covers your doctor visits and outpatient care. Part D helps pay for your medications, and starting in 2026 you won’t pay more than $2,100 out of pocket for prescriptions each year.

Many people go with Part C (Medicare Advantage), which bundles Parts A and B (and often D) through a private company and often includes extra benefits.

What Is Medicaid

Medicaid is a joint federal and state health insurance program that helps you when money is tight and medical bills feel overwhelming. It can cover children, pregnant people, adults who don’t earn much, many older adults and people with disabilities. Each state runs its own version under federal rules, so what’s covered and who qualifies depends on where you live. Your state looks at your income, family size and health needs to see if you can get Medicaid.

What’s the Difference Between Medicare and Medicaid

Medicare and Medicaid sound alike, but they differ in their coverage, eligibility and enrollment, so it’s normal to feel unsure about which one fits you. Medicare is usually tied to age or disability, while Medicaid depends more on your income and your state’s rules. You might qualify for one, both or neither, and that can change as your life or finances change. The table below gives you a quick side-by-side picture so you can understand how they differ.

If you’re still unsure which program fits you, a good next step is to visit Medicare.gov and your state’s Medicaid website, then check what you qualify for based on your age, health and income.


Administration	The federal government runs Medicare the same way in every state.	Your state runs its own Medicaid program and shares the cost with the federal government while following national Medicaid rules.
Eligibility	Most people get Medicare when they turn 65. You can also qualify earlier if you have certain disabilities or end-stage kidney failure (end-stage renal disease).	Medicaid is for people with low income, including children, pregnant people, many older adults and people with disabilities. Each state sets its own income limits within federal rules.
Enrollment	You usually sign up around your 65th birthday. After that, you can change your coverage during yearly enrollment periods or after certain life events, like losing other insurance.	You can apply at any time during the year through your state’s Medicaid website, phone line or local office. You don’t have to wait for a special enrollment period.
Coverage	Medicare can cover hospital stays (Part A), doctor and outpatient visits (Part B), prescription drugs (Part D) and Medicare Advantage plans (Part C) that combine these parts in one plan.	Medicaid helps pay for doctor visits, hospital care, many preventive services and long-term support. Some states also cover dental, vision or rides to medical appointments.
Costs	You pay premiums, deductibles and coinsurance. In 2026 your out-of-pocket costs for covered Part D prescription drugs are capped at about $2,100 for the year.	Many people pay little or nothing for Medicaid. Premiums are often free or very low, and copays are small, depending on your income and your state’s rules.
Duration	Coverage usually continues for life once you’re enrolled, as long as you stay eligible and keep paying any required premiums.	Coverage continues while you still meet your state’s income and other rules. It often ends at the end of the month if your income rises or you don’t complete renewal paperwork.
When benefits start	Coverage often begins on the first day of a month. For many people, it starts the month they turn 65 if they sign up on time during the window when they first enroll (called the Initial Enrollment Period).	Once your state decides you qualify, coverage can start on the day you applied or the first day of that month. In some cases, your state may also pay certain medical bills from a few months before you applied.

Who Is Eligible for Medicare & Medicaid

Sorting out who qualifies for Medicare and Medicaid can feel confusing, especially when your health or money situation is changing. At a high level, Medicare usually looks at your age or disability, while Medicaid focuses more on your income and family situation in your state. Understanding the basics of each program’s eligibility can help you narrow your options and decide which website or office to contact first.

Medicare Eligibility

Most people can get Medicare once they turn 65, as long as they meet citizenship and residency rules. Many people are signed up automatically if they already get Social Security benefits. Others need to apply during the seven-month window around their 65th birthday, called their first enrollment period.

You may qualify earlier than 65 if you have certain long-term disabilities or specific health conditions. Medicare is available at any age if you have ALS (Lou Gehrig's disease) affects your nerves and muscles or if you have end-stage renal disease, which is permanent kidney failure that usually means you need regular dialysis or a kidney transplant.

Medicaid Eligibility

Medicaid is meant for people who can't afford health insurance. It can cover children, pregnant people, adults who do not earn much, many older adults and people with disabilities. To qualify, you usually need to live in the state, be a U.S. citizen or meet certain immigration status rules, and fit your state’s income and family-size limits for one of these groups.

Many states have expanded Medicaid to cover most adults with incomes at or below about 138% of the federal poverty level, but the exact income limit depends on where you live and your household size.

States vary in rules and will use the current FPL numbers when deciding if you qualify in 2026, so the best next step is to check your state’s Medicaid website or Healthcare.gov for the latest income limits where you live.

CAN YOU QUALIFY FOR BOTH MEDICARE AND MEDICAID?

If you already have Medicaid and then qualify for Medicare at 65 or because of a disability, you can have both at the same time. That’s called being “dual eligible.” In that case, Medicare pays its share of covered costs first, and Medicaid helps with what’s left. Depending on your income and your state’s rules, Medicaid may pay some or all of your Medicare premiums, copays and deductibles, and you usually also get Extra Help to lower your Part D drug costs.

Medicare vs. Medicaid: Costs & Coverage

When you’re sorting through Medicare and Medicaid, it’s easy to feel lost about what they really cover and what you’ll pay yourself. Medicare can be broken down into different pieces called parts, each with its own bill. Medicaid usually has little or no cost if you qualify. The sections below give you a clear, side-by-side look so you can spot gaps in your coverage and decide where you might need extra help.

Medicare Parts & Costs

You can get Original Medicare (Parts A and B) and add a drug plan (Part D), or you can choose a Medicare Advantage plan (Part C) that packages hospital, doctor and usually drug coverage into one plan from a private company. Original Medicare helps with hospital and medical bills, but you still pay premiums, deductibles and coinsurance, and there’s no overall limit on what you might spend unless you add extra coverage like Medigap or switch to a Medicare Advantage plan.

Medicare Advantage plans have to cover at least what Original Medicare covers and often add extras like dental, vision or hearing, but what you pay and which doctors you can see depend on the plan you pick. If you have Part D, your yearly out-of-pocket costs for covered Part D drugs are capped at $2,100, and once you reach that amount you don’t pay copays or coinsurance for those covered drugs for the rest of the year.


Part A	Inpatient hospital care Skilled nursing facility care Some home health care Hospice care	Most people pay $0 monthly premium because they or a spouse worked and paid Medicare taxes long enough (about 10 years / 40 quarters) In 2025, the inpatient hospital deductible is $1,676 for each benefit period Daily coinsurance applies for longer hospital and skilled nursing facility stays These amounts are reset each year and may be higher in 2026
Part B	Doctor visits Outpatient care Many preventive services Some medical equipment	In 2025, the standard monthly premium is $185.00 The annual Part B deductible is $257 in 2025 After the deductible, you usually pay 20% of the Medicare-approved amount for most covered services. Premiums and deductibles are updated each year and may rise in 2026
Part C (Medicare Advantage)	All Part A and Part B benefits Most plans include Part D drugs Often extra benefits like dental, vision or hearing	Plan premiums vary Some plans have $0 premium on top of Part B Copays and yearly out-of-pocket limits set by each plan
Part D	Outpatient prescription drugs through stand-alone plans or Medicare Advantage with drug coverage	Monthly premium and deductible depend on the plan In 2026, out-of-pocket costs for covered Part D drugs are capped at $2,100 for the year; after that, covered Part D drugs cost $0 for the rest of the year

*Exact dollar amounts for premiums and deductibles change each year. For current figures, check the cost pages on Medicare.gov.

WHEN CAN COSTS BE FREE FOR MEDICARE PART A

You can get Part A with no monthly premium, called premium-free Part A, if:

You or your spouse worked and paid Medicare taxes long enough, usually about 10 years.
You qualify for Social Security or Railroad Retirement benefits, even if you haven’t filed yet.
You already receive monthly Social Security or Railroad Retirement benefits.

If you’re under 65, you can still get Part A without a premium if:

You’ve received Social Security disability benefits for 24 months.
You qualify for Medicare because of permanent kidney failure requiring regular dialysis or a kidney transplant.

If you’re not sure whether your Part A will be free, you’re not alone. The easiest next step is to check your estimate on Medicare.gov or call Social Security so you know exactly what to expect.

Medicaid Benefits & Costs

If you’re worried about medical bills and your income is low, Medicaid can help you get basic care without sinking deeper into debt. No matter where you live, your state has to cover a set of essential health services, and many states choose to add extra benefits on top of those basics. Children and teens may get coverage through Medicaid or through the Children’s Health Insurance Program (CHIP), which works alongside Medicaid in many states.

To see exactly what your coverage includes, check your state’s Medicaid website or call your state Medicaid office so you know what help you can use right now.

MANDATORY MEDICAID BENEFITS

Below is a list of services every state has to cover. Think of these as the baseline benefits required by federal law; your state might offer even more on top of them.

Inpatient hospital services
Outpatient hospital services
Physician services
Laboratory and X-ray services
Nursing facility services for adults
Home health services for people who qualify for nursing-facility care
Rural health clinic services
Federally qualified health center services
Family planning services and supplies
Early and Periodic Screening, Diagnostic and Treatment (EPSDT) services for children and teens
Certified nurse midwife services
Certified pediatric and family nurse practitioner services
Freestanding birth center services (where recognized by the state)
Transportation to medical care
Tobacco cessation counseling for pregnant people

Most people with Medicaid pay little or nothing for these covered services, though some states charge small copays or modest premiums. To see exactly what your Medicaid plan covers and what you might pay, your best move is to visit your state’s Medicaid website and review its benefits and cost-sharing rules.

Bottom Line

Medicare and Medicaid are designed for different groups, but here's good news: if you're 65+ and don't have much income, you might qualify for both. Medicare comes with premiums and deductibles you'll need to budget for, while Medicaid typically won't cost you anything (or very little). It can get overwhelming, so start with Medicare.gov to understand your Medicare options, then check your state's Medicaid site to see if you qualify for extra help. Having both can really take the financial pressure off your healthcare costs.

Medicaid vs. Medicare: FAQ

Below we’ve answered frequently asked questions about Medicare and Medicaid:

Which is better, Medicaid or Medicare?

It depends on your situation. Medicare works for people 65 or older and those with qualifying disabilities, requiring premiums and deductibles. Medicaid helps low-income individuals and families with little or no cost. You can have both if you qualify based on age and income.

What is the highest income to be eligible for Medicaid?

In states that expanded Medicaid, most adults qualify with incomes at or below 138% of the federal poverty level. The exact limit depends on your state and household size. Non-expansion states have lower thresholds, often covering only specific groups. Check your state's Medicaid website or HealthCare.gov for current income limits.

Do I need Medicare if I have Medicaid?

If you have Medicaid and turn 65, you should enroll in Medicare. Many people qualify for both programs at the same time, called being dual eligible. Medicare pays its share first, then Medicaid covers some or all of your Medicare premiums, deductibles and copays based on your income.

Who uses Medicaid the most?

Medicaid covers children, pregnant people, adults with low incomes, many older adults and people with disabilities. Each state sets its own income limits within federal rules. Many states expanded coverage to adults earning up to 138% of the federal poverty level, greatly increasing the number of adults who qualify.

Which is primary if I have Medicare and Medicaid?

Medicare is primary when you have both programs. Medicare pays its share of covered costs first, then Medicaid helps with remaining expenses. Depending on your income and state rules, Medicaid may pay some or all of your Medicare premiums, copays and deductibles, substantially reducing your out-of-pocket costs.

Are Medicare and Medicaid the same?

Medicare and Medicaid are different programs. Medicare is federal insurance for people 65 or older and those with certain disabilities, requiring premiums and deductibles. Medicaid is a state-federal program for people with low incomes, usually costing little or nothing. You can qualify for both programs simultaneously.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

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sources

Medicare.gov. "Medicare." Accessed November 21, 2025.
Medicare.gov. "A Quick Guide to Medicare & Medicaid." Accessed November 21, 2025.
Medicaid.gov. "Eligibility Policy." Accessed November 21, 2025.
Medicaid.gov. "Medicaid expansion & what it means for you." Accessed November 21, 2025.
Centers for Medicare and Medicaid Services. "Dually Eligible Individuals – Categories ." Accessed November 21, 2025.