Medicare vs Medicaid: What’s the Difference?

• Medicare is a health insurance program provided by the federal government primarily for people aged 65 and above

• Medicaid is a health insurance program provided by state governments working with the federal government primarily for people with low-income

• If you qualify for Medicare and Medicaid (dually eligible), you can enroll in both—and this should help cover many of your healthcare costs

• If you need help, you can contact our team of licensed insurance agents below

Do Medicare terms leave you feeling confused?

There are names like Medicare Part A and Medicare Supplement Plan A, Medicare Advantage and Medigap plans, and various other titles that can be confusing.

However, if there’s one thing the “naming department” got right, it’s the terms Medicare and Medicaid. That’s because Medicare primarily provides medical care (usually people aged 65 and over), while Medicaid typically gives medical aid to people with lower incomes.

There are more differences between the two programs, so let’s compare them.

Quick Chart: What’s the Difference Between Medicaid and Medicare?

	Medicaid	Medicare
Provided by	State governments working with the federal government	The federal government
Eligibility	States set their own eligibility requirements Mostly people below a set income threshold (varies by state)	People aged 65 and over People with ESRD or ALS People with disabilities
Coverage	Medicaid coverage includes: Inpatient services Outpatient services Physician services Laboratory and X-ray services Home health services Other services (differs by state)	Medicare coverage depends on which parts/plans you enroll in: Part A = Hospital coverage Part B = Medical coverage Part C = another way to get A + B, usually with drug coverage and other perks Part D = Drug coverage
Cost	Typically low or zero-cost	Monthly premiums depending on plan type Deductibles, copays, and coinsurance for covered services

What is Medicaid?

Medicaid is a health insurance program that typically helps low-income individuals with medical costs. Each state has its own Medicaid program, but the federal government sets a few rules that all states must abide by. 

Medicaid was created in 1965 alongside Medicare. While Medicare covers mostly older people, Medicaid was created to help people with lower incomes and resources with their medical costs. 

Who is Eligible For Medicaid?

Generally, people with incomes lower than the federal poverty level (FPL) may qualify for Medicaid (133% FPL in most states). However, each state sets its own eligibility requirements for its Medicaid program—including how far below the FPL one has to be to qualify. 

You can check your state’s eligibility requirements on Medicaid’s website or use healthcare.gov to see if you’re eligible. 

Medicaid programs typically also cover children, people with disabilities, and low-income pregnant women and parents/caretakers. 

What Does Medicaid Cover?

All Medicaid programs are required to cover transportation, inpatient and outpatient hospital services, x-rays, nursing facility care, and other services. These are included in the list of mandatory items and services that all state Medicaid programs must adhere to. 

Here’s a full list of the mandatory coverage of Medicaid taken from Medicaid.gov:

• Transportation to medical care 
• Inpatient hospital services 
• Outpatient hospital services 
• Rural health clinic services 
• Federally qualified health center services 
• Laboratory and X-ray services 
• Nursing facility services 
• Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services 
• Family planning services 
• Tobacco cessation counseling for pregnant women Physician services 
• Home health services 
• Nurse Midwife services 
• Certified pediatric and family nurse practitioner services 
• Freestanding birth center services when licensed or otherwise recognized by the state 
• Medication Assisted Treatment (MAT)
• Routine patient costs of items and services for beneficiaries enrolled in qualifying clinical trials 

In addition to the above, states may choose to include optional services in their Medicaid program. These could include clinic services, prescription drugs, prosthetics, eyeglasses, dental care, and other services approved by the Secretary. 

Here’s the full list taken from Medicaid.gov: 

• Other licensed practitioner services 
• Private duty nursing services 
• Clinic services 
• Dental services 
• Physical therapy 
• Occupational therapy 
• Speech, hearing, and language disorder services 
• Prescription drugs 
• Dentures 
• Prosthetics 
• Eyeglasses 
• Other diagnostic, screening, preventive, and rehabilitative services 
• Services for individuals age 65 or older in an Institution for Mental Disease (IMD) 
• Services in an intermediate care facility for Individuals with intellectual disability 
• Inpatient psychiatric services for individuals under the age of 21 
• Hospice 
• Case management 
• TB-related services 
• Respiratory care for ventilator-dependent individuals 
• Personal care 
• Primary care case management 
• Primary and secondary medical strategies, treatment, and services for individuals with sickle cell disease 
• State plan home and community-based services 
• Self-directed personal assistance services 
• Community First Choice Option (CFC) 
• Alternative Benefit Plan (ABP) 
• Health homes for enrollees with chronic conditions 
• Other services approved by the Secretary

If you are enrolled in Medicare, Medicaid may also help pay your Medicare premiums. There are four Medicare Savings Programs (MSPs), each with its own set of income qualifications. 

How Much Does Medicaid Cost?

Typically, states may implement some cost-sharing for Medicaid-covered services. These are usually in the form of deductibles, copays, and coinsurance. However, states cannot impose cost-sharing for Medicaid-covered emergency services, family planning services, pregnancy-related services, or preventive services for children. 

If your state has some cost-sharing for Medicaid-covered services, you’ll typically find that this is lower than that of Medicare’s cost-sharing. 

What is Medicare?

Medicare is a federal health insurance program designed primarily for seniors aged 65 and above. It is provided by the federal government and does not have income requirements to enroll. 

Medicare was also created in 1965. However, unlike Medicaid, this program was made specifically for older Americans. 

Who is Eligible for Medicare? 

Medicare is available to people 65 and over, as well as to people with ESRD, ALS, or disabilities. 

What Does Medicare Cover?

Medicare can be divided into four parts:

• Medicare Part A covers inpatient hospital costs. If you’re admitted to a hospital, Medicare Part A should cover some of your costs. Together, Medicare Part A and B form Original Medicare, which is provided directly by the federal government.

• Medicare Part B covers outpatient medical costs. This could include any medically necessary services, doctor appointments, durable medical equipment, preventive services, and much more. Medicare Part B is part of Original Medicare, meaning that it’s provided directly by the federal government.

• Medicare Part C is provided by private insurance companies. Part C plans generally include everything covered in Medicare Parts A and B and usually include prescription drug coverage (Medicare Part D), as well as other perks (such as dental, vision, and hearing care).

• Medicare Part D covers prescription drugs. Part D plans are provided by private insurance companies that work closely with Medicare. 

How Much Does Medicare Cost?

There are several costs associated with Medicare, including deductibles, copays, and coinsurance. 

Here’s a quick rundown of how much Medicare costs in 2026:

Medicare Costs in 2024 (Taken from Medicare.gov)*
Part A	Premium: $0 for most people Deductible: $1,736 Inpatient hospital copays:Day 1 – 60: $0Day 61 – 90: $434/dayDay 91 – 150: $868/day (using lifetime reserve days)Day 151 onwards: You pay 100% Skilled nursing facility copays:Day 1 – 20: $0Day 21 – 100: $217/dayDay 100 onwards: You pay 100%
Part B	Premium: $202.90 (base premium) Deductible: $283 Most items and services: 20% coinsurance
Part C	Premium: $18.50 average in 2024 (according to the KFF) but many have $0 premiums in 2026 Deductible: Varies by plan Copays: Varies by plan Maximum Out-of-Pocket: Varies by plan
Part D	Premium: $38.99 (national base premium) Deductible: $545 (maximum) Copays: Depends on drug tier and coverage stage Maximum Out-of-Pocket: $2,100 in 2026

*All numbers taken from Medicare.gov unless stated otherwise

Can You Have Medicare and Medicaid?

Yes. If you are eligible for both Medicare and Medicaid, you may enroll in both. People with Medicare and full Medicaid coverage are “dually eligible.” 

If you have Medicare and full Medicaid coverage, Medicare will be your first payer. Medicaid will pay last after Medicare and any other insurance you have. 

If you have both programs, Medicare and Medicaid, most of your healthcare costs should be covered, but you may still be subject to some out-of-pocket expenses. 

Can You Enroll in a Medicare Advantage Plan and Medicaid?

Yes. If you have Medicare and Medicaid, you may enroll in a D-SNP, a Medicare Advantage Plan that coordinates coverage between Medicare and Medicaid. 

A D-SNP, or Dual Special Needs Plan, is available from private insurance companies. 

Like other Medicare Advantage plans, D-SNP plans are typically location-based, and you can usually choose between Health Maintenance Organization plans (HMO) or Preferred Provider Organization (PPO) plans. In addition to coordinating Medicare and Medicaid coverage, D-SNPs may also include other perks. 

Can You Enroll in a Medicare Supplement Plan and Medicaid?

If you have both Medicare and Medicaid, most of your healthcare costs should be covered. That’s why, according to Medicareadvocacy.org, you typically shouldn’t need a Medicare Supplement (Medigap) Plan if you already have Medicaid coverage.  

Apart from this reason, in most cases, it’s also illegal for someone to try to sell you a Medicare Supplement Plan if they know you are enrolled in Medicaid. 

Conclusion: How Medicare and Medicaid Work Together

Medicare and Medicaid were both created to make healthcare more accessible and affordable for people who need it. 

If you qualify for Medicare and Medicaid, enrolling in both could be a good idea and would cover a lot of your healthcare needs. 

If you have any more questions and want to speak to one of our Licensed Insurance Agents, don’t hesitate to reach out to us!  Call or text us at +1 877-360-6565 (TTY: 711), and we’ll help you find the right plan fit for you.