Medicare and Medicaid: Two Different Programs
Medicare and Medicaid are both federal health insurance programs, but they serve different populations and operate very differently. The similarity in names leads to constant confusion — understanding the difference could save you thousands of dollars in healthcare costs.
Here is the short version: Medicare is primarily for people 65 and older, regardless of income. Medicaid is primarily for people with low income, regardless of age.
What Is Medicare?
Medicare is a federal health insurance program primarily for Americans aged 65 and older. It also covers certain younger people with disabilities or End-Stage Renal Disease. Medicare is administered by the federal government and funded by payroll taxes, premiums, and general revenue.
Medicare Part A: Hospital Insurance
Part A covers inpatient hospital care, skilled nursing facility care, hospice care, and some home health care. Most people do not pay a premium for Part A if they or their spouse worked and paid Medicare taxes for at least 10 years.
Medicare Part B: Medical Insurance
Part B covers outpatient care, doctor visits, preventive services, and medical equipment. In 2026, the standard Part B premium is $185.00 per month. Higher-income beneficiaries pay more through IRMAA (Income-Related Monthly Adjustment Amount).
Medicare Part C: Medicare Advantage
Part C (Medicare Advantage) is an alternative to Original Medicare where you enroll in a private insurance plan that bundles Parts A and B, often with Part D drug coverage. Plans typically include dental, vision, and hearing benefits not covered by Original Medicare.
Medicare Part D: Prescription Drug Coverage
Part D is optional prescription drug coverage sold through private insurance companies. If you do not enroll when first eligible, you may pay a permanent late enrollment penalty.
What Is Medicaid?
Medicaid is a joint federal-state program that provides health coverage to low-income individuals and families. Unlike Medicare, Medicaid eligibility and benefits vary significantly by state.
Medicaid covers a broad population: children, pregnant women, parents, seniors, and adults with disabilities who meet income and asset requirements.
Who Qualifies for Medicaid?
Eligibility depends on income, assets, state of residence, and citizenship status. Under the ACA Medicaid expansion, most adults with incomes up to 138% of the federal poverty level qualify in expansion states.
In 2026, 138% of the federal poverty level is approximately $20,783 for an individual and $35,647 for a family of three.
Key Differences: Medicare vs. Medicaid
| Feature | Medicare | Medicaid |
|---|---|---|
| Primary eligibility | Age 65+ or disability | Low income |
| Administered by | Federal government | State governments (with federal oversight) |
| Income requirement | No | Yes |
| Premium cost | Part B: ~$185/month | Usually free or very low |
| Dental coverage | Limited (Medicare Advantage only) | Varies by state |
| Long-term care | Limited | Extensive |
Dual Eligibility: Medicare and Medicaid Together
Some people qualify for both Medicare and Medicaid — these are called “dual eligibles.” People who have both coverage can have their Medicare premiums, deductibles, and cost-sharing paid by Medicaid, which dramatically reduces out-of-pocket healthcare costs.
About 12 million Americans are dual-eligible in 2026. If you are 65+ and have low income, you may qualify for both programs.
How to Apply for Medicare
You are automatically enrolled in Medicare Parts A and B if you are already receiving Social Security benefits when you turn 65. If not:
- Apply online at SSA.gov
- Call Social Security at 1-800-772-1213
- Visit your local Social Security office
Initial Enrollment Period: the 7-month window around your 65th birthday (3 months before, the month of, and 3 months after).
How to Apply for Medicaid
Apply through your state’s Medicaid agency or through the federal Health Insurance Marketplace at Healthcare.gov. You can apply any time of year — Medicaid has no enrollment period.
Required documents typically include proof of income, residency, identity, and citizenship or immigration status.
What Medicare Does NOT Cover
- Routine dental care (fillings, cleanings, dentures)
- Routine vision and hearing exams (outside Medicare Advantage)
- Long-term custodial care (nursing home care for daily activities)
- Cosmetic surgery
- Acupuncture (with some exceptions)
Medicare Supplement Insurance (Medigap) can help fill gaps in Medicare coverage. Long-term care insurance is separate from both Medicare and Medicaid.
Planning for Healthcare Costs in Retirement
Medicare is not free. The average retired couple will spend approximately $315,000 on healthcare costs in retirement, according to Fidelity’s 2026 estimate. Planning ahead includes:
- Contributing to a Health Savings Account (HSA) before Medicare enrollment
- Understanding Medicare Supplement (Medigap) options
- Evaluating Medicare Advantage vs. Original Medicare for your health needs
- Planning for long-term care costs separate from Medicare
Bottom Line
Medicare is for people 65+ and certain disabled individuals. Medicaid is for low-income Americans of any age. If you are turning 65, enroll in Medicare during your Initial Enrollment Period to avoid late penalties. If your income is limited, check your state’s Medicaid eligibility — healthcare.gov is the simplest starting point.