What Is Medicare?
Medicare is a federal health insurance program primarily for people aged 65 and older. It also covers certain younger individuals with disabilities and people with End-Stage Renal Disease (ESRD). Unlike Medicaid, Medicare is not means-tested — eligibility is based on age and work history, not income.
Medicare is divided into four parts:
- Part A — Hospital insurance (inpatient care, skilled nursing, hospice)
- Part B — Medical insurance (outpatient care, doctor visits, preventive services)
- Part C — Medicare Advantage (private plans bundling A+B, often with extras)
- Part D — Prescription drug coverage
What Is Medicaid?
Medicaid is a joint federal-state program that provides health coverage to low-income individuals and families. Unlike Medicare, Medicaid is means-tested — you must meet income and asset limits to qualify. Because it's administered by states, eligibility rules, covered services, and provider payments vary significantly from state to state.
Medicaid covers a broad population including:
- Low-income adults (especially following ACA expansion)
- Children in low-income families
- Pregnant women below income thresholds
- People with disabilities
- Low-income seniors (often dually eligible with Medicare)
Key Differences at a Glance
| Feature | Medicare | Medicaid |
|---|---|---|
| Who runs it? | Federal government (CMS) | Federal + state governments |
| Who qualifies? | 65+, disabled, ESRD | Low-income individuals/families |
| Income-based? | No | Yes |
| Premiums? | Yes (Part B, D) | Rarely, very low if any |
| Long-term care? | Very limited | Yes (primary payer) |
What Each Program Covers
Medicare Coverage
Medicare covers hospital stays, physician visits, outpatient services, preventive screenings, and prescription drugs. However, it does not cover dental, vision, hearing aids, or long-term custodial care. These gaps are significant, and many beneficiaries buy supplemental Medigap policies to fill them.
Medicaid Coverage
Medicaid often covers everything Medicare does, plus dental care, vision, hearing, and — critically — long-term care in nursing homes. This makes Medicaid the primary payer for nursing home care in the US for those who qualify after a spend-down process.
Dual Eligibility
About 12 million Americans qualify for both Medicare and Medicaid, known as "dual eligibles." These individuals typically have Medicare as their primary insurer, with Medicaid covering premiums, cost-sharing, and services Medicare doesn't cover. Dual eligibles often have access to special D-SNP (Dual Special Needs Plan) Medicare Advantage plans.
Cost Differences
Medicare beneficiaries pay premiums (Part B is $174.70/month in 2024 at standard), deductibles, and coinsurance. Medicaid is typically free or very low cost for enrollees — the federal government reimburses states for 50–77% of costs based on a state's per-capita income.
How to Enroll
Medicare: You can enroll through Social Security Administration (SSA) online, by phone, or at a local SSA office. Most people are automatically enrolled at 65 if they're already receiving Social Security benefits.
Medicaid: Apply through your state's Medicaid agency or through HealthCare.gov. Income and asset documentation is required. Eligibility is re-determined annually.