Medicare vs Medicaid Explained: Key Differences
Medicare is federal insurance for people 65+ (and some with disabilities), while Medicaid is state-run coverage for low-income households, with most states covering adults up to 138% of the Federal Poverty Level. About 12 million Americans are dual-eligible for both programs.
What Is Medicare?
Medicare is a federal health insurance program primarily for people age 65 and older, regardless of income. It also covers younger people with certain disabilities and those with End-Stage Renal Disease. Medicare has four parts: Part A (hospital insurance, usually premium-free), Part B (medical insurance, with a monthly premium), Part C (Medicare Advantage, private plan alternatives), and Part D (prescription drug coverage).
What Is Medicaid?
Medicaid is a joint federal and state program that provides health coverage to low-income individuals and families. Eligibility is based on income and varies by state. Under the ACA expansion, most states cover adults with incomes up to 138% of the Federal Poverty Level. Medicaid typically covers a broader range of services than Medicare, including long-term care, which Medicare generally doesn't cover.
Key Differences at a Glance
Medicare is primarily age-based (65+); Medicaid is primarily income-based. Medicare is federally managed with uniform national rules; Medicaid is state-managed with varying eligibility and benefits. Medicare has premiums, deductibles, and coinsurance; Medicaid often has no or minimal cost-sharing. Medicare doesn't cover long-term custodial care; Medicaid is the largest payer of nursing home care in the U.S.
Dual Eligibility: Having Both
About 12 million Americans are "dual-eligible" — qualifying for both Medicare and Medicaid. For dual-eligible beneficiaries, Medicare is the primary payer for Medicare-covered services, and Medicaid fills in the gaps — covering Medicare premiums, deductibles, and coinsurance, plus providing additional services like dental, vision, and long-term care that Medicare doesn't cover.
Medicaid Expansion and the Coverage Gap
Under the ACA, states had the option to expand Medicaid to cover adults up to 138% FPL. As of 2026, 40 states and DC have expanded Medicaid. In non-expansion states, there's a "coverage gap" — adults with incomes below 100% FPL don't qualify for Medicaid (too high) but also don't qualify for ACA subsidies (too low). If you're in a non-expansion state, check your state's specific eligibility rules.
Frequently Asked Questions
What is the main difference between Medicare and Medicaid?
Medicare is a federal insurance program primarily for people age 65+ (and some younger people with disabilities), regardless of income. Medicaid is a joint federal-state program for low-income individuals and families, with eligibility based on income. Medicare is managed federally with uniform rules; Medicaid varies by state and often covers more services, including long-term care.
Can I have both Medicare and Medicaid?
Yes. About 12 million Americans are 'dual-eligible.' When you have both, Medicare is the primary payer for Medicare-covered services, and Medicaid fills the gaps — paying your Medicare premiums, deductibles, and coinsurance, plus covering extra services like dental, vision, and long-term care that Medicare doesn't cover.
Does Medicare cover long-term care or nursing homes?
Original Medicare (Parts A and B) does not cover long-term custodial care or most nursing home stays beyond limited skilled nursing care after a hospital stay. Medicaid is the largest payer of nursing home care in the U.S. For long-term care needs, you'd typically rely on Medicaid (if eligible), long-term care insurance, or paying out of pocket.
How do I qualify for Medicaid?
Eligibility is based on income and household size, and rules vary by state. Under the ACA expansion, most states cover adults with incomes up to 138% of the Federal Poverty Level. Children, pregnant women, seniors, and people with disabilities have different (often more generous) eligibility thresholds. In non-expansion states, some low-income adults fall into the 'coverage gap' and qualify for neither Medicaid nor subsidies.