How Medicare and Medicaid Are Different from Other Insurances

Medicare and Medicaid are two government-run health insurance programs that serve millions of Americans. They are designed to provide affordable health care to those who need it most, but they differ significantly from other types of insurance.

One key difference is that Medicare is a federal program, while Medicaid is a joint federal-state program. This means that Medicare is administered by the federal government, while Medicaid is administered by individual states with some federal oversight.

Medicare is available to people 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).

Medicare and Medicaid are two government programs that provide health insurance to millions of Americans.

Medicare is a federal program that primarily serves people 65 or older, while Medicaid is a joint federal-state program that serves low-income individuals and families.

Medicare has four parts: A, B, C, and D, which cover hospital stays, doctor visits, prescription drugs, and other services.

Medicaid has a wide range of benefits, including doctor visits, hospital stays, and prescription drugs, but the specific services covered vary by state.

Medicare is funded through payroll taxes and premium payments from beneficiaries, while Medicaid is funded through a combination of federal and state dollars.

Medicaid is a needs-based program, meaning eligibility is determined by income and family size, and not by age or health status.

Medicaid eligibility is mostly based on income, with states setting their own guidelines, but generally covering low-income households, individuals with disabilities, and pregnant women.

To be eligible for Medicaid, you must meet certain requirements, such as having a household income below 138% of the federal poverty level (FPL) or receiving Supplemental Security Income (SSI).

Medicare eligibility, on the other hand, is mostly based on age, with individuals becoming eligible at 65 years old, or those under 65 with specific conditions like ALS.

Some people qualify for both Medicare and Medicaid, known as dual eligibility, which can provide comprehensive coverage for healthcare needs.

Here are the main eligibility categories for Medicaid:

Medicare coverage is divided into four main parts: A (hospital insurance), B (medical insurance), C (Medicare-approved private insurance plans), and D (prescription drug coverage).

Eligibility for Medicaid and Medicare is based on different criteria, but both programs aim to support individuals with low income and limited resources. Medicaid eligibility varies by state, but generally includes people with low income, pregnant women, children, and individuals with disabilities.

Medicaid eligibility also depends on citizenship and age, with some states providing coverage to adults with disabilities and limited resources. The Affordable Care Act gave states the option to expand Medicaid coverage, but some states did not, leaving certain at-risk groups ineligible.

Medicare eligibility is mostly based on age, with individuals over 65 years old automatically eligible. However, some individuals under 65 may be eligible due to specific conditions, such as ALS, or end-stage renal disease.

If you're eligible for both Medicare and Medicaid, you can enroll in both programs and receive coverage. This is known as "dual eligibility" or "dually eligible." Medicaid can help pay Medicare premiums, deductibles, and copays, making it easier to access healthcare.

Here's a breakdown of the eligibility criteria for Medicare:

You might be eligible for both Medicare and Medicaid, a situation known as dual eligibility. This affects over 15% of people with Medicaid enrollment, with 12 million individuals currently having both types of coverage.

Having dual eligibility can be a huge help, especially for older adults with low incomes and people living with disabilities, who make up 7.2 million and 4.8 million of those 12 million individuals, respectively.

Qualifying for both Medicare and Medicaid is called "dual eligibility." A person who qualifies for both programs might be referred to as "dual eligible" or "dually eligible."

Medicare and Medicaid work together to cover your healthcare costs when you're dual eligible. This coordination can help reduce the financial burden of healthcare for those who need comprehensive care.

Medicare has four main parts: Part A, Part B, Part C, and Part D. Each part covers different healthcare services.

Part A, or hospital insurance, covers inpatient care in hospitals. Part B is medical insurance, covering outpatient care. Together, you can get fairly comprehensive basic coverage. Part C includes Medicare-approved private insurance plans that provide more substantial coverage. Part D covers prescription drug coverage.

Medicaid, on the other hand, offers various mandatory benefits, including hospital services, physician services, and home health services. You may also qualify for optional benefits like prescription drug coverage, dental care, and hospice care. Each state has varying Medicaid coverage, so you'll need to research what you can receive in your area.

Medicare Part A is a vital component of the Medicare program, covering essential medical expenses. It's often referred to as hospital insurance.

Medicare Part A helps pay for inpatient hospital stays, care in a skilled nursing facility, home health services, hospice care, and nursing home care.

Payroll taxes cover the costs of Part A, so it's not usually mandatory to pay a monthly premium. However, if you haven't paid Medicare taxes for at least 40 quarters, you'll need to pay the premium.

The Medicare Part A premiums are either $285 or $518 in 2025, depending on how long you or your spouse has paid Medicare taxes.

To give you a better idea of what's covered under Part A, here's a quick rundown:

Medicare typically serves people over 65 years old or those with certain health conditions or disabilities, whereas Medicaid is available to low-income households.

Medicaid doesn't have age limits like Medicare does, and it offers benefits that Medicare doesn't typically cover.

Most people on Medicare Part A don't need to pay a monthly premium.

The standard Medicare Part B premium was $148.50 in 2021.

The cost of Medicaid varies based on your state's regulations, your household income, and the program you enroll in.

Lower incomes result in lower out-of-pocket costs for Medicaid.

You may end up paying very little per month for Part D, or something closer to a normal insurance plan premium.

Copayments are expected for certain services like doctor's visits or prescriptions, but some states make it so there aren't any copayments for certain groups, like children or pregnant women.

More than 72 million people were enrolled in Medicaid as of July 2024. This number is a significant portion of the population that relies on government-funded health insurance.

Medicare, another government-funded program, had over 66.7 million enrollees in 2023. This highlights the importance of these programs in providing healthcare coverage to a large number of people.

Medicaid and Medicare, along with other health insurance subsidies, accounted for 24% of the 2023 federal budget. This emphasizes the significant investment the government makes in healthcare programs each year.

Here's a breakdown of the number of people enrolled in Medicaid and Medicare:

Medicare Part B is a type of insurance that helps pay for specific services, including medically necessary doctor's visits, outpatient hospital visits, and home healthcare costs.

These services are crucial for maintaining overall health and well-being, and Medicare Part B helps make them more affordable.

People on Medicare Part B must pay a monthly premium, which was $185 in 2025, and an annual deductible of $257 before Medicare covers treatment.

Premiums might be higher, depending on the person's income and current Social Security benefits.

After meeting the deductible, most people on a Medicare plan will need to pay 20% of costs approved by Medicare.

This can add up quickly, which is why it's essential to understand the costs involved in Medicare Part B.

Here's a breakdown of the costs associated with Medicare Part B:

It's worth noting that these costs are subject to change, so it's essential to stay informed about any updates to Medicare Part B.

Part D is a type of coverage that's administered by private insurance companies. You'll need to pay an additional premium for it.

The cost of Part D can vary depending on your income.

Medicare offers an alternative to traditional Part A and Part B coverage through Advantage plans, which are private insurance policies provided by partnering companies.

These plans can provide extra coverage for services like vision, hearing, or dental care, and in exchange, you pay a monthly premium.

Medicare Advantage plans offer the same coverage as parts A and B, and may also include additional services such as dental, vision, and hearing care.

Some plans team up with HMOs or Preferred Provider Organizations (PPOs) to deliver preventive healthcare or specialist services.

You can also find plans that focus on people with specific needs, such as individuals living with diabetes.

Medicaid does not offer an equivalent to Medicare Advantage plans, but it does have different managed care options and specialized programs available.

The Program of All-Inclusive Care for the Elderly (PACE) is an example of a Medicaid program that combines both Medicare and Medicaid coverage.

If you're 65 or older, you qualify for Medicare. This is a great starting point for healthcare coverage, but it's not free. Medicare can be costly, especially if you have limited income.

You may also qualify for Medicaid, which can help pay for out-of-pocket costs associated with Medicare. This is called being "dual eligible."