What is the difference between Medicare and Medicaid
The main difference between Medicare and Medicaid is who qualifies and how each program is administered. Medicare is federal health insurance primarily for people age 65 and older and certain younger people with disabilities or qualifying medical conditions. Medicaid is a joint federal and state health coverage program for people who meet financial and other eligibility requirements.[1][2]
Medicare eligibility is generally not based on having a low income or on how many assets you own. Medicaid eligibility can depend on income and, for some eligibility categories, resources or assets. Because the programs have different eligibility rules, some people qualify for both Medicare and Medicaid at the same time.[3]
Medicare vs. Medicaid at a Glance
| Feature | Medicare | Medicaid |
|---|---|---|
| Who administers it? | Federal government | States under federal requirements |
| How is it funded? | Federal program | Jointly funded by federal and state governments |
| Who is it primarily for? | People age 65 and older and certain younger people with qualifying disabilities or medical conditions | People who meet financial and other eligibility requirements |
| Is basic eligibility based on low income? | No: Age, Disability, Work Credits (Part A Costs) | Yes, financial eligibility is an important factor |
| Can assets affect eligibility? | Not for basic Medicare eligibility | Yes, for some Medicaid eligibility categories |
| Do rules vary by state? | Core Medicare eligibility and benefits are federal | Yes |
| Long-term custodial care? | Not covered | Can be covered for eligible beneficiaries |
| Can you have both? | Yes | Yes |
Medicare and Medicaid are often mentioned together, but they are two separate health care programs. They have different eligibility requirements, different financing structures, and different rules about what they cover.
Understanding the difference becomes especially important as you approach age 65, help an aging parent, consider long-term care, or try to determine whether you may qualify for help paying Medicare costs.
What Is Medicare?
Medicare is a federal health insurance program primarily for people age 65 and older. Certain people can qualify for Medicare before age 65 because of a disability, End-Stage Renal Disease, or ALS.[1]
Basic Medicare eligibility is not limited to people with low incomes. Someone can have substantial income, retirement savings, investments, or other assets and still qualify for Medicare if the person otherwise meets Medicare's eligibility requirements.
Income can still affect what some Medicare beneficiaries pay. For example, higher-income beneficiaries can pay additional amounts for Medicare Part B and Medicare Part D.
The Four Parts of Medicare
- Medicare Part A helps cover inpatient hospital care, qualifying skilled nursing facility care, hospice care, and certain home health services.
- Medicare Part B helps cover physician services, outpatient care, preventive services, durable medical equipment, and other medically necessary services.
- Medicare Part C, also known as Medicare Advantage, is an alternative way to receive Medicare benefits through a private insurance company that contracts with Medicare.
- Medicare Part D provides outpatient prescription drug coverage through private Medicare-approved plans.
People who choose Original Medicare may also purchase Medicare Supplement Insurance, commonly called Medigap, to help with certain out-of-pocket costs that Original Medicare does not pay.
What Is Medicaid?
Medicaid is a joint federal and state program that provides health coverage to eligible people who meet financial and other requirements. Medicaid covers eligible low-income adults, children, pregnant women, older adults, and people with disabilities.[2]
Unlike Medicare, Medicaid is administered by individual states according to federal requirements. This means eligibility rules, available programs, application procedures, and certain benefits can differ depending on where you live.
Depending on the Medicaid eligibility category, the state may consider factors such as:
- Income
- Household size
- Age
- Pregnancy
- Disability status
- Resources or assets for certain programs
- Citizenship or qualifying immigration status
- State residency
Because Medicaid rules differ by state and eligibility category, there is not one universal Medicaid income or asset limit that applies to everyone in the United States.
What Is the Biggest Difference Between Medicare and Medicaid?
The biggest difference between Medicare and Medicaid is how you qualify for coverage.
Medicare eligibility is primarily connected to age, disability, or certain medical conditions. Medicaid eligibility is generally connected to financial need along with other federal and state eligibility requirements.
Medicare is primarily connected to age or qualifying disability or medical conditions.
Medicaid is primarily connected to financial and other eligibility requirements.
This is a simplified way to distinguish the programs. Medicaid eligibility can become much more detailed because different eligibility categories use different financial rules.
Medicare vs. Medicaid Eligibility
| Eligibility Question | Medicare | Medicaid |
|---|---|---|
| Can age qualify you? | Yes, generally beginning at 65 if applicable citizenship or residency requirements are met | Age can affect the eligibility category, but age alone does not automatically qualify someone |
| Can disability qualify you? | Yes, under Medicare's disability eligibility rules | Yes, disability can be an eligibility pathway |
| Is income considered? | Not generally for basic eligibility, although income can affect premiums and financial assistance | Yes |
| Are assets considered? | Not for basic Medicare eligibility | For some eligibility categories |
| Do requirements vary by state? | Core Medicare eligibility rules are federal | Yes |
Is Medicare or Medicaid Based on Income?
Is Medicare Based on Income?
Basic Medicare eligibility is generally not based on having a low income. A person does not become ineligible for Medicare simply because the person earns too much money.
Income can still affect Medicare costs. Higher-income beneficiaries may pay an Income-Related Monthly Adjustment Amount, commonly called IRMAA, in addition to their Medicare Part B and Part D premiums.
People with limited income and resources may also qualify for separate programs that help with Medicare costs.
Is Medicaid Based on Income?
Yes. Income is an important part of Medicaid eligibility.
How income is counted depends on the Medicaid eligibility category. Many children, pregnant women, parents, and adults are evaluated using Modified Adjusted Gross Income rules. Other groups, including many people who qualify based on age, blindness, disability, or a need for long-term services and supports, can be subject to different financial eligibility rules.[3]
Income limits can also vary by state and Medicaid program.
Does Medicare or Medicaid Have an Asset Limit?
Does Medicare Have an Asset Limit?
Basic Medicare eligibility generally does not have an asset limit.
Owning a home, having money in savings, holding retirement accounts, or owning investments does not by itself prevent someone from qualifying for Medicare.
However, separate programs that help people pay Medicare expenses can have income and resource requirements.
Does Medicaid Have an Asset Limit?
It depends on the Medicaid eligibility category.
Some Medicaid eligibility groups do not use a traditional asset test. Many non-MAGI eligibility groups, including certain programs for people who are older, blind, disabled, or seeking long-term services and supports, can have resource requirements.[3]
The treatment of assets such as a home, vehicle, retirement accounts, life insurance, and other property can depend on the Medicaid program and state.
What Do Medicare and Medicaid Cover?
Both programs can pay for health care, but the benefits are structured differently.
| Type of Care | Medicare | Medicaid |
|---|---|---|
| Inpatient hospital care | Yes, subject to Medicare coverage rules and cost sharing | Covered under Medicaid subject to program rules |
| Physician services | Yes, primarily through Part B | Covered under Medicaid subject to program rules |
| Prescription drugs | Generally through Part D or other Medicare drug coverage | States generally provide prescription drug coverage as an optional Medicaid benefit |
| Preventive services | Yes, many preventive services are covered | Coverage depends on applicable Medicaid requirements and state program |
| Skilled nursing facility care | Limited coverage when Medicare requirements are met | Can cover nursing facility services for eligible beneficiaries |
| Long-term custodial care | Generally no | Can be covered for eligible beneficiaries |
| Home and community-based long-term services | Limited | May be available through state Medicaid programs and waivers |
Federal law requires state Medicaid programs to provide certain mandatory benefits. States can also elect to provide optional benefits through their Medicaid state plans.[4]
Medicare vs. Medicaid for Long-Term Care
Long-term care is one of the most important differences between Medicare and Medicaid.
Medicare generally does not cover long-term custodial care. Medicare can cover short-term skilled nursing facility care and certain home health services when Medicare's requirements are met, but it is not designed to pay indefinitely for custodial care simply because someone needs help with activities such as bathing, dressing, eating, or using the bathroom.[5]
Medicaid is the primary payer for long-term services and supports in the United States. For people who meet applicable eligibility requirements, Medicaid can provide coverage across institutional and community settings.[6]
Depending on the state and program, Medicaid long-term services and supports can include:
- Nursing facility care
- Home and community-based services
- Personal care services
- Assistance with activities of daily living
- Other long-term services available through a state Medicaid program or waiver
Can You Have Medicare and Medicaid at the Same Time?
Yes. A person can qualify for both Medicare and Medicaid.
People who have Medicare and full Medicaid coverage are commonly described as dually eligible or dual eligible beneficiaries.[7]
For eligible beneficiaries, Medicaid may help with Medicare expenses and may cover certain services that Medicare does not cover.
Depending on the person's Medicaid eligibility, assistance can include help with:
- Medicare Part A premiums when applicable
- Medicare Part B premiums
- Deductibles
- Coinsurance
- Copayments
- Certain health care services not covered by Medicare
- Long-term services and supports
The amount of assistance depends on the beneficiary's Medicaid eligibility category and state program.
Which Pays First, Medicare or Medicaid?
If you have Medicare and full Medicaid coverage, Medicare generally pays first for Medicare-covered services. Medicaid pays after Medicare and any other applicable health insurance.[7]
Example
Suppose you have both Medicare and full Medicaid coverage and receive a physician service that Medicare covers.
- Medicare generally processes the claim first.
- Any other applicable health insurance is coordinated according to payer rules.
- Medicaid may then pay eligible remaining costs according to your state's Medicaid rules.
Exactly what you owe depends on the service, your Medicaid eligibility, the provider, and the applicable program rules.
What Are Medicare Savings Programs?
Medicare Savings Programs are state-administered programs that help certain people with limited income and resources pay Medicare costs.[8]
Depending on the program and eligibility level, assistance may help pay:
- Medicare Part A premiums in certain situations
- Medicare Part B premiums
- Medicare deductibles
- Medicare coinsurance
- Medicare copayments
The four Medicare Savings Programs are:
- Qualified Medicare Beneficiary Program, or QMB
- Specified Low-Income Medicare Beneficiary Program, or SLMB
- Qualifying Individual Program, or QI
- Qualified Disabled Working Individual Program, or QDWI
Eligibility limits and rules can vary by state. A person should not assume that being over a published federal income or resource amount automatically means the person cannot qualify.
Does Medicaid Replace Medicare When You Turn 65?
No, not automatically.
If you receive Medicaid before age 65 and later become eligible for Medicare, you may become eligible for both programs.
Becoming eligible for Medicare does not automatically mean Medicaid disappears. Your Medicaid eligibility continues to depend on the rules that apply to your state and eligibility category.
If you qualify for Medicare and full Medicaid, Medicare generally becomes the primary payer for Medicare-covered services while Medicaid may provide additional coverage and financial assistance.[7]
Which Costs More, Medicare or Medicaid?
There is not one simple answer because Medicare and Medicaid use different cost structures.
Medicare Costs
Depending on the coverage a person has, Medicare beneficiaries may pay:
- Monthly premiums
- Deductibles
- Copayments
- Coinsurance
- Prescription drug costs
- Premiums for private Medicare coverage such as Medicare Advantage, Part D, or Medigap when applicable
Medicaid Costs
Medicaid cost sharing varies by state, eligibility group, income, and service. For many beneficiaries, Medicaid can significantly reduce out-of-pocket health care costs.
People who qualify for both Medicare and Medicaid may have Medicaid assistance with some Medicare premiums and cost-sharing expenses.
How Do You Apply for Medicare or Medicaid?
How to Apply for Medicare
Medicare Part A and Part B enrollment is generally handled through the Social Security Administration.
Some people are automatically enrolled in Medicare, while others need to apply. Whether you need to take action can depend on your age, disability status, and whether you are already receiving Social Security or Railroad Retirement Board benefits.
Official Medicare enrollment information is available at Medicare.gov.
How to Apply for Medicaid
Medicaid eligibility is determined by the state where you live. Medicaid.gov directs applicants to contact their state Medicaid agency to apply for coverage or determine eligibility.[9]
Your state may request information about:
- Income
- Household members
- Age
- Residency
- Citizenship or qualifying immigration status
- Current health insurance
- Disability status when applicable
- Assets or resources when applicable
You can locate your state Medicaid agency through Medicaid.gov.
Do You Need Medicare, Medicaid, or Both?
You do not necessarily have to choose between Medicare and Medicaid.
If you are approaching age 65 or otherwise becoming eligible for Medicare, the first question is whether and when you need to enroll in Medicare.
If you also have limited income or resources, you may want to determine whether you qualify for Medicaid or a Medicare Savings Program.
Because Medicare and Medicaid have separate eligibility rules, someone may qualify for:
- Medicare only
- Medicaid only
- Both Medicare and Medicaid
- Medicare plus limited assistance through a Medicare Savings Program
Understanding which category applies to you can make a significant difference in both your coverage and your out-of-pocket health care costs.
Frequently Asked Questions About Medicare and Medicaid
What is the main difference between Medicare and Medicaid?
Medicare is a federal health insurance program primarily for people age 65 and older and certain younger people with disabilities or qualifying medical conditions. Medicaid is a joint federal and state health coverage program for people who meet financial and other eligibility requirements.[1][2]
Are Medicare and Medicaid the same thing?
No. Medicare and Medicaid are separate government health care programs with different eligibility requirements, benefits, financing, and administration.
Can you have Medicare and Medicaid at the same time?
Yes. People who qualify for both programs can have Medicare and Medicaid at the same time. People with Medicare and full Medicaid coverage are commonly called dual eligible beneficiaries.[7]
Is Medicare based on income?
Basic Medicare eligibility is generally not based on having a low income. Income can affect what some beneficiaries pay for Part B and Part D and can affect eligibility for programs that help pay Medicare costs.
Is Medicaid based on income?
Yes. Financial eligibility is an important component of Medicaid. The exact income rules depend on the Medicaid eligibility category and state.
Does Medicare check your assets?
Basic Medicare eligibility generally does not include an asset test. Owning a home, retirement accounts, savings, or investments does not by itself prevent someone from qualifying for Medicare.
Does Medicaid check your assets?
Some Medicaid eligibility categories do and some do not. Resource rules depend on the eligibility group and state. Many Medicaid programs involving older adults, people with disabilities, or long-term services and supports can have resource requirements.[3]
Which pays first, Medicare or Medicaid?
For people who have Medicare and full Medicaid coverage, Medicare generally pays first for Medicare-covered services. Medicaid pays after Medicare and other applicable insurance.[7]
Can Medicaid pay your Medicare Part B premium?
Yes. If you meet the eligibility requirements for a Medicare Savings Program or applicable Medicaid assistance, the state may help pay your Medicare Part B premium.[8]
Does Medicaid replace Medicare when you turn 65?
Not necessarily. If you qualify for Medicaid and later become eligible for Medicare, you may qualify for both. Your continued Medicaid eligibility depends on the rules that apply to your state and Medicaid eligibility category.
Which program covers long-term nursing home care?
Medicare generally does not cover long-term custodial nursing home care. Medicaid can cover nursing facility services and other long-term services and supports for people who meet applicable eligibility requirements.[5][6]
Is Medicaid only for people under age 65?
No. Medicaid can provide coverage to eligible children, adults, pregnant women, older adults, and people with disabilities. Some people age 65 and older have both Medicare and Medicaid.[2]
Key Takeaways
- Medicare and Medicaid are different health care programs.
- Medicare is a federal health insurance program primarily for people age 65 and older and certain younger people who qualify because of disability or specific medical conditions.
- Medicaid is jointly funded by federal and state governments and administered by states according to federal requirements.
- Medicare eligibility is generally not based on having a low income or limited assets.
- Medicaid eligibility includes financial requirements that vary by eligibility category and state.
- Medicare generally does not cover long-term custodial care, while Medicaid can provide long-term services and supports for eligible beneficiaries.
- You can qualify for Medicare and Medicaid at the same time.
- For people with Medicare and full Medicaid coverage, Medicare generally pays first for Medicare-covered services and Medicaid pays after Medicare and other applicable coverage.
The Bottom Line
When asking what is the difference between Medicare and Medicaid, the most important distinction is eligibility.
Medicare is primarily health insurance based on age or qualifying disability or medical conditions. Medicaid provides health coverage to people who meet financial and other eligibility requirements that can vary by state.
For some people, the answer is not Medicare or Medicaid. It is Medicare and Medicaid. If you qualify for both, the programs can work together to provide health coverage and help reduce certain out-of-pocket costs.
Last updated: August 14, 2026
Official Sources
- Medicare.gov. Get started with Medicare. Medicare explains that Medicare is health insurance for people age 65 or older who meet applicable citizenship or residency requirements and that some people can qualify earlier because of disability, End-Stage Renal Disease, or ALS. Medicare eligibility overview
- Medicaid.gov. Medicaid. Medicaid provides health coverage to eligible low-income adults, children, pregnant women, older adults, and people with disabilities. Medicaid is administered by states according to federal requirements and jointly funded by states and the federal government. Medicaid program overview
- Medicaid.gov. Eligibility Policy. Medicaid eligibility rules vary by eligibility group and can include income and resource requirements. Long-term services and supports eligibility can also include asset-transfer rules. Medicaid eligibility policy
- Medicaid.gov. Mandatory and Optional Medicaid Benefits. Federal law requires states to provide certain mandatory Medicaid benefits and allows states to provide additional optional benefits through their state plans. Mandatory and optional Medicaid benefits
- Medicare.gov. Long-Term Care Coverage. Medicare explains that it generally does not cover long-term custodial care and that long-term care differs from skilled nursing facility care. Medicare long-term care coverage
- Medicaid.gov. Long Term Services and Supports. Medicaid describes itself as the primary payer across the United States for long-term care services and provides coverage through institutional and community-based programs. Medicaid long-term services and supports
- Medicare.gov. Medicaid. Medicare explains that people with Medicare and full Medicaid coverage are dually eligible. Medicare generally pays first for Medicare-covered services, while Medicaid pays after Medicare and other health insurance. How Medicare works with Medicaid
- Medicare.gov. Medicare Savings Programs. Medicare Savings Programs can help eligible people pay Medicare premiums and, depending on the program, certain deductibles, coinsurance, and copayments. Medicare Savings Programs
- Medicaid.gov. Where Can People Get Help With Medicaid and CHIP? Medicaid directs applicants to their state Medicaid agency to apply for coverage, determine eligibility, check an application, or get other Medicaid assistance. Find your state Medicaid agency
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“Medicare and Medicaid are often discussed together, but they solve different problems. Medicare is primarily health insurance tied to age or qualifying disability or medical conditions, while Medicaid is based on financial and other eligibility rules that can vary by state.”
Matt Maresch, NSSA®, CLTC® · Senior Healthcare Planning
“One of the most important planning differences is long-term care. Medicare generally does not pay for ongoing custodial care, while Medicaid can provide long-term services and supports for people who meet the program’s eligibility requirements.”
Matt Maresch, NSSA®, CLTC® · Senior Healthcare Planning
“Qualifying for Medicare does not automatically mean Medicaid ends. Some people are eligible for both programs, and when they are, Medicare generally pays first for Medicare-covered services while Medicaid may help with eligible remaining costs and services.”
Matt Maresch, NSSA®, CLTC® · Senior Healthcare Planning
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- Medicare is a federal health insurance program primarily for people age 65 and older and certain younger people who qualify because of disability or specific medical conditions.
- Medicaid is jointly funded by federal and state governments and administered by states according to federal requirements.
- Basic Medicare eligibility is generally not based on having a low income or limited assets, while Medicaid eligibility includes financial requirements that vary by eligibility category and state.
- Medicare generally does not cover long-term custodial care, while Medicaid can provide long-term services and supports for eligible beneficiaries.
- People can qualify for Medicare and Medicaid at the same time. For those with Medicare and full Medicaid coverage, Medicare generally pays first for Medicare-covered services.
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Maresch, Matt, NSSA®, CLTC®. “What Is the Difference Between Medicare and Medicaid?” Senior Healthcare Planning. Updated August 14, 2026. https://seniorhealthcareplanning.com/newsletter/what-is-the-difference-between-medicare-and-medicaid/
Editorial note: Please retain the attribution when quoting expert commentary. Program rules can change, so time-sensitive facts should be checked against the official sources listed above.
This article is for educational purposes. Medicare and Medicaid eligibility can depend on individual circumstances. Medicaid eligibility, financial requirements, benefits, and long-term care rules can vary by state and eligibility category.