Medicaid vs. Medicare: Understanding Differences 2024

Medicare and Medicaid differ in eligibility and coverage. Medicare serves people 65 and older or those with disabilities, while Medicaid is for those who meet specific income criteria.

By Mark Fitzpatrick

Edited by Amy Wilder

Updated: November 22, 2024

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Medicare and Medicaid are similar in that they are government-funded health programs, but there are key differences in eligibility, coverage and costs. For instance, Medicare has an age qualifier, requiring individuals to be 65 or older. On the other hand, Medicaid has an income qualifier, and individuals must fall under a certain income.

Knowing the difference between Medicaid and Medicare will allow you to evaluate your eligibility and understand the available resources.

Key Takeaways

Medicare is a government program that provides health insurance to people 65 and older or people with disabilities.

Medicaid is a government-funded health insurance program that covers those who earn up to 138% of the federal poverty level.

The out-of-pocket cost of Medicaid is often free for covered services. The costs for services under Medicare will vary depending on the coverage.

What Is the Difference Between Medicare & Medicaid?

There are more differences between Medicare and Medicaid than just eligibility requirements. Both programs differ in terms of governing powers, enrollment, coverage and costs.

Review the Medicare vs. Medicaid chart below to understand the differences between both programs and find what suits you best.

TABLE COMPARING MEDICARE AND MEDICAID

Characteristic	Medicare	Medicaid
Administration	Federal government	Federal guidelines State management
Eligibility	65 or older Qualifying disabilities	Low income Limits vary by state
Enrollment	Open enrollment Special qualifying circumstances	Anytime, no special enrollment period
Coverage	Part A: Hospitals Part B: Doctors procedures Part C: Medicare Advantage Part D: Prescriptions	Preventative medicine Hospitals Doctor visits Prescriptions Vision/Dental (sometimes) Long term care
Costs	Varies by plan	Low to no cost
Duration	65+ for lifetime	Until income improves

Medicare & Medicaid Eligibility

While Medicare and Medicaid both have differing basic qualifiers, with one being age or disability and the other being income, there are more factors to consider. Recognizing the nuances of both programs’ eligibility requirements can help you determine what suits your situation best and what to expect prior to applying.

Medicare Eligibility

Medicare policies are available to those older than 65. This means that if you retire earlier, for instance, at age 60, you will not benefit from Medicare right away. The earliest you can sign up for Medicare is three months before you turn 65.

However, there are exceptions for those under 65. Individuals with amyotrophic lateral sclerosis (ALS) or end-stage renal disease (ESRD) can apply for Medicare regardless of age.

CAN YOU QUALIFY FOR BOTH MEDICARE AND MEDICAID?

If you are receiving Medicaid and turn 65, you may also qualify for Medicare and have dual eligibility. Medicare will pay for costs first, then Medicaid supplements your policy. This supplement can mean partially- or fully-covered premiums, copays or deductibles, which can vary depending on your income.

Medicaid Eligibility

Compared to Medicare’s very straightforward eligibility requirements, Medicaid has some requirements that vary from state to state. Generally, however, Medicaid has a list of eligible groups that should be covered, including low-income families, qualified pregnant women and children and individuals who receive Supplemental Security Income (SSI).

Medicaid eligibility depends on factors like your state, income, household size and whether you have a disability. Income thresholds depend on your state, but most states have adopted the Medicaid expansion, which increases the income requirement to include those earning up to 138% of the federal poverty level.

For instance, in the lower 48 states, 138% of the federal poverty level equates to $13,590 annual income for individuals or $27,750 for a family of four. In Alaska, this equates to $16,990 annually for individuals or $34,690 for a family of four.

To check your state-specific information on benefits, go to Medicaid.gov and choose your state.

Medicaid Expansion Status by State

State	Medicaid Expansion Status
Alabama	Not Adopted
Alaska	Adopted
Arizona	Adopted
Arkansas	Adopted
California	Adopted
Colorado	Adopted
Connecticut	Adopted
Delaware	Adopted
District of Columbia	Adopted
Florida	Not Adopted
Georgia	Not Adopted
Hawaii	Adopted
Idaho	Adopted
Illinois	Adopted
Indiana	Adopted
Iowa	Adopted
Kansas	Not Adopted
Kentucky	Adopted
Louisiana	Adopted
Maine	Adopted
Maryland	Adopted
Massachusetts	Adopted
Michigan	Adopted
Minnesota	Adopted
Mississippi	Not Adopted
Missouri	Adopted
Montana	Adopted
Nebraska	Adopted
Nevada	Adopted
New Hampshire	Adopted
New Jersey	Adopted
New Mexico	Adopted
New York	Adopted
North Carolina	Not Adopted
North Dakota	Adopted
Ohio	Adopted
Oklahoma	Adopted
Oregon	Adopted
Pennsylvania	Adopted
Rhode Island	Adopted
South Carolina	Not Adopted
South Dakota	Not Adopted
Tennessee	Not Adopted
Texas	Not Adopted
Utah	Adopted
Vermont	Adopted
Virginia	Adopted
Washington	Adopted
West Virginia	Adopted
Wisconsin	Not Adopted
Wyoming	Not Adopted

Medicare vs. Medicaid: Coverage & Costs

Medicare and Medicaid have differing out-of-pocket costs, which can affect which program suits you best. Since Medicaid is designed for low-income individuals, the barrier to entry is lower. Medicare costs may be higher as it is designed for seniors who likely have more medical needs.

Medicare Coverage & Costs

With Medicare, there are two coverage types: Original Medicare and a Medicare Advantage plan. Original Medicare, also known as Part A and Part B, includes hospital and medical insurance from the government. Medicare Part D covers medications and is optional. However, there are many coverage gaps in Original Medicare, as it does not cover preventative services, dental, vision and more.

Medicare Advantage plans also referred to as Part C, are offered by private companies and bundle Part A, B and sometimes D, along with extra benefits that can include vision, dental or hearing coverage. It acts more like a traditional health plan but comes with coinsurance, deductibles and copays, and there are many top providers of Medicare Advantage plans. If you are eligible for Original Medicare, you will also be eligible for Medicare Advantage.

Understanding Medicare Parts

Medicare Part	Coverage	Cost
Part A	Hospitalization Skilled Nursing Facility Hospice Home Health Care	Premiums are often free but can cost up to $499/month $1,556 deductible for each benefit period Inpatient coinsurance is tiered based on days
Part B	Doctor Visits Outpatient Care Medical Equipment Preventative Services Home Health Care	$170.10 Standard Premium (increases with income) $233 per year deductible
Part C	Medicare Advantage Plans	Vary by plan Average $19 per month (2022)
Part D	Prescription Drug Coverage	Premiums and costs vary

The costs for Part A can be free under certain circumstances, such as if:

You or your spouse has paid Medicare taxes for 10 or more years
You or your spouse have Medicare-covered government employment
You are eligible for Social Security or Railroad Benefits but have not filed for them
You are receiving retirement benefits from Social Security or the Railroad Retirement Board

Additionally, Medicare can be free for those under 65 if:

You are eligible for Social Security Benefits or Railroad Benefits for two years
You are a kidney dialysis or transplant patient

There are more parts to Medicare aside from parts A, B, C and D — but the aforementioned plans are the main parts.

Medicaid Benefits & Costs

Compared to Medicare, the costs and coverage under Medicaid are straightforward. If you have Medicaid, you will pay nothing for covered services. Children can also benefit from a program related to Medicaid known as the Children’s Health Insurance Program (CHIP).

MANDATORY MEDICAID BENEFITS:

Inpatient hospital services
Outpatient hospital services
EPSDT: Early and periodic screening, diagnostic and treatment services
Nursing facility services
Home health services
Physician services
Rural health clinic services
Federally qualified health center services
Laboratory and X-ray services
Family planning services
Nurse midwife services
Certified pediatric and family nurse practitioner services
Freestanding birth center services (when licensed or otherwise recognized by the state)
Transportation to medical care
Tobacco cessation counseling for pregnant women

These benefits are federally-mandated, which means all states must include these benefits. However, states are also free to add more benefits beyond these requirements. Check with your state’s Medicaid agency for a list of benefits to ensure you can maximize your coverage.

Medicaid vs. Medicare FAQs

Knowing the difference between Medicare and Medicaid is essential to make the right decision — especially for those eligible for both.

What is the difference between Medicaid and Medicare?

Medicaid and Medicare are government-sponsored health programs, but their main difference is their eligibility requirements. Medicare is only available to those over age 65, while Medicaid is available to those under a certain income threshold. There are also differences between their costs and coverage, as Medicare has several options and Medicaid does not. The federal government administers the Medicare program, and each state is responsible for administering Medicaid.

Who is eligible for Medicare and Medicaid?

To qualify for Medicare, you must be at least 65 or have a qualifying disability. Medicaid requires that your income is under or up to 138% of the federal poverty line. The income threshold varies by state.

Are Medicare and Medicaid the same?

While both Medicare and Medicaid are health insurance programs, their levels of coverage, groups covered and out-of-pocket costs differ.

Is Medicaid the same as medical insurance?

Yes, Medicaid is similar to health insurance in that it provides coverage for a variety of services, such as inpatient and outpatient services, physician services, laboratory and x-ray services and more. There are also a few optional benefits that can be added, depending on your needs, such as prescription drugs, physical therapy and occupational therapy.

About Mark Fitzpatrick

Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.

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sources

ASPE. "Poverty Guidelines." Accessed October 24, 2024.