Medicare and Medicaid are both government programs and both help people pay for health care. However, that’s where the similarities end. There are important differences between the two programs, including eligibility criteria, what services they cover, how they are funded, and who runs the program and makes the rules the govern each program. In this post, we are going to cover the difference between Medicare and Medicaid, what each program covers, who is eligible, and whether you can have both (dual coverage).
What is Medicaid?
Medicaid is an assistance program that provides free or low-cost health coverage to very low-income families, pregnant women, and the elderly as well as to people with disabilities.
The program is the nation’s public health insurance program for people with low income.
Medicaid covers 1 in 5 Americans, including many with complex and costly needs for care.
Additionally, the program is the principal source of long-term care coverage for Americans.
The expansion of Medicaid under the Affordable Care Act opened up eligibility to low-income adults without dependents.
You may be eligible for Medicaid if you have limited income and are:
- 65 or older
- A child under 19
- Pregnant
- Living with a disability
- A parent or adult caring for a child
- An adult without dependent children (in certain states)
What Services Does Medicaid Cover?
The major services covered by Medicaid are:
- Doctor visits
- Hospital stays
- Long-term services and supports
- Preventive care, including immunizations, mammograms, colonoscopies, and other needed care
- Prenatal and maternity care
- Mental health care
- Necessary medications
- Vision and dental care (for children)
What is Medicare?
Medicare is a national health insurance program run by the federal government.
Medicare covers:
- People age 65 and older.
- Some people under age 65 who may qualify due to a disability or another special situation.
Unlike Medicaid, Medicare is the same everywhere in the United States and is run by the Centers for Medicare & Medicaid Services, an agency of the federal government.
What Services Does Medicare Cover?
There are 4 different parts to Medicare. Original Medicare is a fee-for-service health plan that has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance).
Original Medicare pays for much, but not all of the cost for health care
services and supplies.
As a result, there are Medicare Supplement Insurance (Medigap) policies that are sold
by private companies.
These policies can help pay some of the remaining health care costs, like
copayments, coinsurance, and deductibles.
Medicare Part A helps cover:
- Inpatient care in hospitals
- Skilled nursing facility care
- Hospice care
- Home health care
Medicare Part B helps cover:
- Services from doctors and other health care providers
- Outpatient care
- Home health care
- Durable medical equipment (DME) (like wheelchairs, walkers, hospital beds,
and other equipment) - Many preventive services (like screenings, shots or vaccines, and yearly
“Wellness” visits)
Medicare Advantage (also known as Part C)
- An “all in one” alternative to Original Medicare. These “bundled” plans include
Part A, Part B, and usually Part D. - Plans may have lower out-of-pocket costs than Original Medicare.
- Most plans offer extra benefits that Original Medicare doesn’t cover— like
vision, hearing, and dental services.
Part D (prescription drug coverage)
- Helps cover the cost of prescription drugs (including many recommended
shots or vaccines) - Run by private insurance companies that follow rules set by Medicare
- May help lower your drug costs and help protect against higher costs in the
future
What’s the difference between Medicare and Medicaid?
The difference between Medicaid and Medicare is that Medicaid is managed by states and is based on income.
On the other hand, Medicare is managed by the federal government and is mainly based on age.
However, there are special circumstances, like certain disabilities, that may allow younger people to get Medicare.
The chart below, summarized from United HealthCare provides in a clearer format the difference between Medicare and Medicaid.
Medicare |
Medicaid |
|
| What is it? | A federal health insurance program for people who are:
|
A joint federal and state program that helps pay health care costs for certain people and families with limited income and resources.
Different programs under the Medicaid umbrella are designed to help specific populations. |
| Who Runs it? | Federal government | State governments |
| What does it cover? | Depends on the coverage you choose and may include:
|
Each state creates its own Medicaid programs, following federal guidelines.
There are mandatory benefits and optional benefits. Mandatory benefits include, in part:
|
| What does it cost? | It depends on the coverage you choose.
Costs may include premiums, deductibles, copays, and coinsurance. |
It depends on your income and the rules in your state.
Costs may include premiums, deductibles, copays, and coinsurance. Certain groups are exempt from most out-of-pocket costs. |
| How do I get it? | Many people are automatically enrolled in Parts A and B when they turn 65.
You can also contact your local Social Security office to see if you are eligible. |
Eligibility depends on the rules in your state.
Call your State Medical Assistance (Medicaid) office to see if you qualify. |
The short video below, by InfusionCenters, does a great job of comparing the two programs. We highly recommend that you watch it.
How is Medicare Funded?
Medicare is an insurance program. The program is funded through trust funds that those who are covered by the program have paid into.
It serves people over 65 primarily, whatever their income; and serves younger disabled people and dialysis patients. Patients pay part of costs through deductibles for hospital and other costs. Small monthly premiums are required for non-hospital coverage.
How is Medicaid Funded?
Medicaid is funded by the federal government in conjunction with all fifty individual states.
Therefore, unlike Medicare (which is funded solely by the federal government), Medicaid programs differ from one state to another, since the states have control over some aspects of the program.
Medicaid is an “entitlement” program. This means that anyone who meets eligibility rules has a right to enroll in coverage.
It also means that states have guaranteed federal financial support for part of the cost of their programs.
Can you get both Medicaid and Medicare?
Yes, and this is also referred to as Dual Eligibility.
Some people qualify for both Medicare and Medicaid and are called “dual
eligibles.”
If you have Medicare and full Medicaid coverage, most of your health
care costs are likely covered.
Additionally, you can get your Medicare coverage through Original Medicare or a Medicare
Advantage Plan.
If you have Medicare and/or full Medicaid, Medicare covers your
Part D prescription drugs.
Also, Medicaid may still cover some drugs and other care that Medicare doesn’t cover.
Difference between Medicare and Medicaid Summary
We hope this post on the difference between Medicare and Medicaid was helpful to you.
If you have any questions about Medicaid, you can ask us in the comments section below.
Help us spread the word! If you found this post helpful, help us spread the word by sharing it using the “Share this” button below.
Be sure to check out our other articles about Medicaid.
How to Apply for Coverage by State
Medicaid Income Limits by State
Medicaid Phone Number for Florida
Income limits for Florida Medicaid
Alabama Income Limits and How to Apply
Alaska Income Limits and Chart
