Understanding the difference between Medicare and Medicaid

Medicare vs. Medicaid

People often confuse Medicare with Medicaid because their names sound similar, but they are not the same. The two programs differ in several important ways. The following information will help you understand the difference between Medicare, a federal program for people over 65 or with certain disabilities; and Medicaid, a state-run program for low-income individuals and families. By learning more about these programs, you can decide which one is right for you and your health care needs.

What is the difference between Medicare and Medicaid?

Medicare is a federal health insurance program primarily for people 65 or older or under 65 with certain disabilities, and eligibility is not based on income. Medicaid is a joint federal and state health insurance program for people with limited income and resources. Medicare offers hospital coverage, outpatient services, and prescription drugs. Medicaid often covers services Medicare does not fully pay for, including long-term care, with lower or no out-of-pocket costs. Medicare is administered by the federal government and is the same across all states. Medicaid, however, is administered by individual states. That means eligibility rules and covered benefits can vary depending on where you live.

Medicare overview

Medicare is a federal insurance program for people 65 and older or those with disabilities or end-stage renal disease. It consists of four parts that are either provided by the federal government or private insurance companies. Medicare Part A (hospital) and Part B (doctor) are provided by the federal government. Medicare Part C (Medicare Advantage) and Medicare Part D (prescription drug) are offered through private insurance companies.

Learn more about Medicare basics.

Medicaid overview

Medicaid, also known as Medical Assistance, is a public health insurance program that provides free or low-cost health coverage to eligible low-income individuals and families. It is jointly funded by the federal government and state governments but is managed by individual states. This means the specific benefits and eligibility requirements can vary from state to state. Medicaid covers a wide range of health care services, including doctor visits, hospital stays, long-term care, and prevention services.

Medicare vs. Medicaid: Key differences

	Medicare	Medicaid
Eligibility requirements	Age 65 or older or with certain disabilities at any income level	Any age with qualifying low income
Federal or state funded	Federal government	Federal and state government
Coverage/Benefits	Original Medicare covers Part A (inpatient hospital stays) and Part B (outpatient services) Part C (Medicare Advantage) and Part D (drug coverage) are offered through private insurance companies	Federal benefits: inpatient care and outpatient services State benefits: vary by state but may include drug coverage and rehabilitative services
Costs	Premiums, deductibles, copays	Generally low or no cost for eligible individuals

 

Who is eligible for both Medicare and Medicaid?

Some individuals qualify for both Medicare and Medicaid. This is called being “dual eligible.”

You may qualify for both programs if:

• You are 65 or older (or under 65 with certain disabilities) AND
• You meet your state’s income and asset requirements for Medicaid

Dual eligibility allows members to receive the benefits of both programs working together. People who are dual eligible may receive additional financial help and expanded coverage.

If you have both, which pays first?

If you are dual eligible. Medicare pays first. Medicaid pays second. This means Medicare is primary payer, and Medicaid the secondary payer.

Here’s how it works:

Example 1: Doctor visit

• The doctor bills Medicare first and Medicare pays its share of the approved amount.
• Medicaid may help cover remaining copays or coinsurance.

Example 2: Hospital stay

• Medicare covers hospital costs after the deductible.
• Medicaid may help pay the deductible or remaining cost-sharing, depending on eligibility level.

Example 3: Prescription drugs

• Medicare Part D covers prescription drugs.
• If you qualify for Medicaid, programs like Extra Help may help pay Part D premiums, deductibles, or copays.

Frequently asked questions about Medicare vs. Medicaid

If you’re wondering about having both Medicare and Medicaid, these frequently asked questions can help you understand how these programs work together, and which one pays for your health care.

Can you have both Medicare and Medicaid?

Yes, you can qualify for both Medicare and Medicaid at the same time. This is called dual eligibility. To qualify, individuals usually need to meet specific income and health requirements set by each program. Medicare-eligible individuals with low income or limited resources qualify for both Medicare and Medicaid, allowing access to a wide range of health care services.

If you have Medicare and Medicaid, which is primary?

If you have both Medicare and Medicaid, Medicare is the primary payer. This means that Medicare pays for your health care services first, and Medicaid covers the costs Medicare doesn’t fully cover. This includes copays, deductibles, and services not covered by Medicare like dental and vision services. In some situations, Medicaid may be the primary payer depending on the services you receive and rules in your state.