Medicare vs. Medicaid: What’s the Difference?

Medicare and Medicaid look and sound alike, but are actually very different. 

One is a federal healthcare program for seniors. The other is a joint federal and state program that provides financial assistance to people with limited income and resources. You can have both Medicare and Medicaid if you qualify.

Here’s some information to help you understand the differences between Medicare and Medicaid (in California, it is called MediCal).  

Qualifying for different types of coverage

Medicare is a federal insurance program that helps pay medical bills from a fund to which users have contributed. It covers people 65 and older, people younger than 65 with certain disabilities, and patients with end-stage kidney disease and other conditions requiring dialysis. Participants usually pay part of the cost.

Medicaid is an assistance program provided jointly by federal and state agencies. It helps with medical expenses for eligible people with limited income and resources.

There are different rules for each state, but in most states, you may be eligible for Medicaid if you are under certain income levels and/or are:

• 65 and older

• A child under age 19

• Pregnant

• Living with a disability

• A parent or adult caring for a child

• An adult with dependent children

• An eligible immigrant

Participants usually pay nothing for covered medical costs, although they may sometimes be responsible for a small copayment or cost share.

Medicaid eligibility

The rules and eligibility for Medicaid differ from state to state. In general, people enrolled in Medicaid have access to preventive care, prenatal and maternity care, doctor visits, hospital stays, long-term services, mental healthcare, medications, and vision and dental care for children. Medicaid may also cover services not typically covered by Medicare.

If you qualify for Medicaid you may also be eligible for help paying for your Medicare prescription drug coverage (Part D).

Are you dual eligible?

Some people can be eligible for both Medicare and Medicaid at the same time.

Dual-eligible beneficiaries are individuals who are eligible for both Medicare and Medicaid. 

People who are dual eligible share costs with state-run Medicare Savings Programs (MSP), which provide help with premiums, deductibles, coinsurance and copayments, depending on the participant's income level and the specific MSP. There are programs where eligible participants may have no copayments or cost shares.