What is the Difference Between Medicare and Medicaid?

While both programs are health insurance programs run and assisted by the government, there are many differences between the two, including who they aim to assist. These terms are often confused, and many people don’t understand how these programs can help them. Additionally, not many people understand what they qualify for, or how to sign up for or receive the benefits that they do qualify for. Let’s get started unwrapping all of these details between Medicare and Medicaid.

 

Medicare

Medicare is the federal health insurance program for seniors. Centers for Medicare and Medicaid Services (CMS) is the federal agency that runs Medicare. CMS provides health coverage to millions of people in the United States through their various programs.  Medicare is individual insurance offered to those qualifying based on age, disability, or qualifying medical condition.

• You must also be a U.S. citizen or a legal permanent resident for at least five consecutive years.

What does Medicare Cover?

There are 4 main services provided by Medicare, often referred to as parts A-D.

• Medicare Part A is hospital services and Part B is medical care. Parts A and B are almost always added when you initially sign up for Medicare.
• Medicare Part C is usually referred to as Medicare Advantage, and is offered by private insurance companies.
• Part D refers to Prescription Drug Coverage, and can be added on to your Original Medicare, or is often bundled into your Medicare Advantage.

There are also supplemental, Fee-For-Service benefits that you can add on to your Medicare plans, or can have included in certain Medicare Advantage Plans.

What does Medicare Cost?

Costs can vary depending on what you enroll for. Most people don’t pay a premium for Part A, though there are some exceptions. In 2024, most people paid $174.7 per month for Part B. Typically, however, your Part B premium will be deducted from your monthly Social Security benefit. The average monthly cost for Part D was $55.5 in 2024.

Medicare Advantage Plans come with their own premium, but many of these plans offer $0 premiums. Some of these plans can even offer reimbursement for Part B costs.

Aside from Premiums, you also need to factor in deductibles, co-pays and co-insurances, and out-of-pocket costs. These can vary by plan as well, so it’s best to compare plans to find the best fit for you.

Read more about enrolling in Medicare.

 

Medicaid

Medicaid is a joint federal and state program that helps cover medical costs for some people with limited income and resources. The federal government has general rules that all state Medicaid programs must follow, but each state runs its own program. This means eligibility requirements and benefits can vary from state to state. The difference between Medicare and Medicaid is as follows:

Who is Eligible for Medicaid?

Low-income families, qualified pregnant women and children, and individuals receiving Supplemental Security Income (SSI) are examples of mandatory eligibility groups. States have additional options for coverage and may choose to cover other groups, such as individuals receiving home and community-based services and children in foster care who are not otherwise eligible. There are also options for states to establish a “medically needy” program for individuals with significant health needs, whose income is too high to otherwise qualify. Find out if you qualify for your state’s Medicaid program.

What does Medicaid Cover?

Federally mandated benefits include inpatient and outpatient medical services such as hospitalization, lab work, X-rays, and doctor visits. People with Medicaid usually don’t pay anything for covered medical expenses but may owe a small co-payment for some items or services.

Medicaid offers benefits that Medicare doesn’t normally cover, like nursing home care and personal care services.

Benefits that vary by state include prescription drugs, physical and occupational therapy, and more.

What does Medicaid Cost?

Some or all of your costs may be covered on Medicaid. Costs are formulated based upon income and eligibility rules in states that offer Medicaid. Those costs can include premiums, deductibles, copays, and coinsurance.

 

Can You Have Both Medicare And Medicaid?

Yes! You can qualify for both individually. If you are over 65, and you meet your states requirements for Medicaid, you can enroll for both together. Medicare and Medicaid together offer more comprehensive benefits for individuals who are eligible for both than being on just one or the other.

 

If You Have Medicare And Medicaid, Which Is Primary?

Medicare is first responsible for medical needs, but Medicaid can cover costs that Medicare coverage  does not. When you visit a provider that takes both Medicare and Medicaid, Medicare pays first for the cost of your care. Medicaid pays second, covering copays and other costs not covered.

If you qualify for both Medicare and Medicaid, you’re likely eligible for the Qualified Medicare Beneficiary (QMB) program, one of four Medicare Savings programs. With the QMB program, you’ll get help with Part A and Part B premiums, coinsurance, and deductibles.