Created in 1965, Medicare and Medicaid are two separate, government-run health insurance programs designed to provide essential health care coverage for specific populations. If you've ever wondered about the differences between these two programs—and how they can help you and those you care about—you're in the right place. Below, we explore the coverages, eligibility rules, and costs of Medicare versus Medicaid.

What's the difference between Medicare and Medicaid?

Medicare is a federal health insurance program for people age 65 and older and younger people with certain disabilities or health conditions. It provides health coverage to about 65 million Americans, including 57 million older adults and nearly 8 million younger people with disabilities.¹

You automatically qualify for Medicare benefits when you turn 65. If you’re under 65, you qualify for Medicare if:

• You’ve received Social Security Disability Insurance (SSDI) benefits or certain Railroad Retirement Board (RRB) disability benefits for at least 24 months.
• You have amyotrophic lateral sclerosis (ALS).
• You have end-stage renal disease (ESRD) and meet certain other conditions.

Medicaid is funded jointly by the federal government and states. It pays for a broad range of medical services and limits out-of-pocket costs for eligible adults, families, older adults, children, pregnant women, people with disabilities, and those receiving Supplemental Security Income (SSI). Roughly 1 in 4 Medicaid enrollees are older adults and people with disabilities.²

Federal law requires states to cover certain groups of people (e.g., pregnant women and children) whose income falls below a certain level. However, states have their own Medicaid rules, and may use different methods to determine eligibility based on income and other factors.

Some people qualify for both Medicare and Medicaid. These people are known as “dual eligible.”

What services do Medicare and Medicaid cover?

Both Medicare and Medicaid cover inpatient and outpatient care, which includes hospital stays, doctor visits, emergency services, and preventive care. Medicaid also covers long-term care services, such as in-home and nursing home care.  Medicare only covers short-term home health or skilled nursing facility services, such as rehabilitation following a hospital stay.

With Medicare, you have the option to secure additional types of coverage and benefits by purchasing a Medicare Advantage (Part C) plan, prescription drug (Part D) coverage, or a supplemental (Medigap) plan. Some states may include additional benefits under their Medicaid program.

How do I enroll in Medicare or Medicaid?

With Medicare, you cannot enroll whenever you want to. Instead, there are specific opportunities to enroll once you become eligible:

• The most common time to enroll is during the Initial Enrollment Period (IEP), which is the three months before, the month of, and the three months after your 65th birthday.
• If the IEP is missed, enrollment is also possible during the General Enrollment Period (Jan-March each year).
• There is also the annual Open Enrollment Period (Oct. 15- Dec. 7 each year) which allows you to join, switch, or drop a Medicare Advantage or Part D prescription drug plan.

If you receive SSDI benefits due to a disability, you do not have to apply to Medicare, since you’ll be automatically enrolled after two years on SSDI.

There are three ways to apply for Medicare Parts A and B:

• Apply online at the Social Security Administration website.
• Call Social Security’s customer hotline at 1-800-772-1213.
• Visit your local Social Security office in person.

When it comes to Medicaid, you can submit an application at any time, all year long. You can apply for Medicaid with your state Medicaid agency or through the Health Insurance Marketplace. Depending on the state where you live, you may be able to apply for Medicaid online, in person, or by phone.

What are the costs of Medicare and Medicaid?

Most people with Medicare pay for a portion of their health care expenses. These expenses are called “out-of-pocket” costs and include premiums, deductibles, and copayments/coinsurance. Your Medicare out-of-pocket costs depend on the type(s) of plans and coverage you have. If you have low income, you may be able to get help paying your Medicare out-of-pocket costs through Medicaid.  

Medicaid costs depend on your income and the state where you live. Like with Medicare, Medicaid costs can include premiums, deductibles, and copayments/coinsurance. These costs typically apply to all Medicaid enrollees—but they’re minimal. Out-of-pocket costs cannot be charged at all for certain groups (e.g., children) and specific health care services (e.g., emergency services).

Where can I get advice on Medicare and Medicaid?

Medicare and Medicaid can be complicated. But if you qualify for one or both of these programs, don’t let confusion stand in the way of the benefits you deserve. Below are several resources where you can find clear, impartial guidance on Medicare and Medicaid enrollment, costs, and more:

1. Your local State Health Insurance Assistance Program (SHIP) is federally funded to provide free, unbiased counseling on Medicare.
2. NCOA has partnered with licensed Medicare advisors who meet our strict Medicare Standards of Excellence (SOE). These trustworthy brokers have met strict guidelines to ensure you can be confident in the enrollment choices you make. Each one has gone through our intensive training and certification process, enabling them to provide in-depth Medicare education and practical decision-making support. Talking to these advisors costs you nothing. 
3. Visit NCOA’s Medicare for Older Adults resource library where you'll find current, in-depth information on Medicare costs, coverage options, and how to enroll.

Sources

1. Kaiser Family Foundation. A Snapshot of Sources of Coverage Among Medicare Beneficiaries. Aug 14, 2023. Found on the internet at https://www.kff.org/medicare/issue-brief/a-snapshot-of-sources-of-coverage-among-medicare-beneficiaries/#:~:text=Medicare%20provides%20health%20insurance%20coverage,or%20Medicare%20Advantage%20private%20plans.

2. Kaiser Family Foundation. 10 Things to Know about Medicaid: Setting the Facts Straight. Found on the internet at: https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/