Because so many people confuse the terms Medicare and Medicaid, we will discuss Medicare vs Medicaid and explain the difference between the two terms. Although the terms are often mentioned in the same sentence, these programs serve different populations, have different eligibility rules, and provide different types of coverage.
Medicare
Medicare is a federal health insurance program. In general, beneficiaries of Medicare are:
- Individuals who are 65 and older
- Those under 65 with specific qualifying disabilites
- People who have beendiagnosed with either ESRD (End-Stage Renal Disease) or ALS
The Parts of Medicare
- Part A – Hospital insurance (covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care)
- Part B – Medical insurance (covers outpatient care, doctors’ visits, preventive services, and durable medical equipment)
- Part C – Medicare Advantage Plans (offered by private insurers as an alternative to Original Medicare, often including vision, dental, and drug coverage)
- Part D – Prescription drug coverage
Medicare Cost
Medicare is not entirely free. Most people get Part A premium-free, but they pay a monthly premium for Part B. They also may pay a premium for Part C and/or Part D. There are also optional Medicare Supplement plans available which also have a monthly premium. Medicare costs include things like deductibles, co-pays and coinsurance. The out-of-pocket amounts differ depending on the plan or plans chosen.
Medicaid
Medicaid is a program that is put in place by both federal and state governments. Individuals who receive this coverage are:
- People with low income who meet the income threshold amount (this varies by state)
- Certain pregnant women and children who meet the income level required
- People with disabilities with income that falls into the state requirement
- Some seniors, including those who also qualify for Medicare
Because Medicaid is administered by each state, the programs vary by state, including eligibility requirements and the services that the program provides.
Medicaid generally covers
- Hospital and doctor visits
- Long-term care (nursing home care)
- Home and community-based services
- Preventive care, mental health services, and more
In many cases, Medicaid covers services that Medicare does not; such as long-term custodial care.
Medicaid Cost
In most cases, Medicaid is either free or very low cost for eligible individuals. States may charge small copays for some medical services.
Medicare vs Medicaid – Key Differences
| Feature | Medicare | Medicaid |
|---|---|---|
| Who It Serves | Primarily people 65+ or those with qualifying disabilities | Low-income individuals and families |
| Administered By | Federal government | State governments (with federal oversight) |
| Cost to Participants | Monthly premiums, deductibles, copays | Usually free or low-cost |
| Long-Term Care | Limited (short-term rehab only) | Covers long-term care, including nursing homes |
| Prescription Drugs | Must purchase Part D or Medicare Advantage coverage | Included in most Medicaid programs |
Can Individuals Have Both
The short answer is, yes! Some individuals qualify for both programs. These are called “dual eligibles.” For these people:
- Medicare typically pays first
- Medicaid may help cover Medicare premiums, deductibles, and services that Medicare does not cover (like long-term care)
Seniors with limited income or disabled individuals who qualify as dual-eligible receive comprehensive coverage at little to no cost.
Additionally; Medicare and Medicaid both play crucial roles in our healthcare system. They each serve a different purpose and population. Understanding who qualifies and what each program covers helps agents, individuals and families make informed healthcare decisions.
For assistance with eligibility or enrollment, consider contacting:
- Medicare.gov or 1-800-MEDICARE
- Click here for each state’s Medicaid office
- A local State Health Insurance Assistance Program (SHIP) for free counseling
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