Medicare vs. Medicaid: What’s the difference?

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Medicare and Medicaid are both government programs that provide assistance with healthcare, but beyond that there are major differences.

Medicare is a federal insurance program that pays medical bills from a fund to which users have contributed. It covers people 65 and older, people younger than 65 with certain disabilities, and patients with end-stage renal disease and other conditions requiring dialysis. Participants usually pay part of the cost.1

Medicaid is an assistance program provided jointly by federal and state agencies. It helps with medical expenses for eligible people with limited income and resources.

You may be eligible if you are 65 and older, a child under age 19, pregnant, living with a disability, a parent or adult caring for a child, an adult with dependent children, or an eligible immigrant. Participants usually pay nothing for covered medical costs but sometimes they may be responsible for a small co-payment.2

The basics of Medicare

There are four different parts of Medicare:3

Part A helps cover inpatient hospital care, skilled nursing care, hospice care and home healthcare. If you paid Medicare taxes while working, you don't pay a monthly premium.

Part B covers medical visits with doctors and other healthcare providers, outpatient care, home healthcare, durable medical equipment, and some preventive services. Most participants pay a monthly premium for Part B.

Part C (also called Medicare Advantage) covers services covered under Parts A and B and usually covers Part D prescription drug coverage (Part D). Part C is run by Medicare-approved private insurance companies. Other services and benefits may be available for an extra cost.

Part D helps to cover the cost of prescription drugs and may help lower the amount you pay for prescriptions. It's run by Medicare-approved private insurance companies.

For more information on Medicare, visit www.medicare.gov, opens new window.

Medicaid eligibility

The rules and eligibility for Medicaid differ from state to state. In general enrollees may have access to preventive care, prenatal and maternity care, doctor visits, hospital stays, long-term services, mental healthcare, medications, and vision and dental care for children. Medicaid may also cover services not typically covered by Medicare.

If you qualify for Medicaid, you may also eligible for help paying for your Medicare prescription drug coverage (Part D).4

Are your dual-eligible?

Some people are enrolled in both Medicare and Medicaid.

Dual-eligible beneficiaries are individuals who are enrolled in Medicare Part A and/or Part B and receive full Medicaid benefits and/or assistance with Medicare premiums.

People who are dual-eligible receive cost sharing through state-run Medicare Savings Programs (MSP), which provide help for premiums, deductibles, coinsurance and copayments, depending on the participant's income level and the specific MSP.

To learn more, go to www.HealthCare.gov/do-I-qualify-for-medicaid, opens new window.

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