What Is the Difference Between Medicare vs. Medicaid?

Eligibility

The biggest difference between Medicare and Medicaid qualifications are age and income. Medicare is mostly for people over 65, although some people under 65 may be eligible for benefits as well. Medicaid is primarily based on income and designed for low-income people of all ages.

In some cases, you may be eligible for both Medicare and Medicaid at the same time—if, for example, if you are 65 or older and make less than a specific amount of money. For certain enrollees, this may be advantageous because being a part of both programs may offer a greater range of services than enrolling or participating in just one. 

However, even if you qualify for both, enrolling in both Medicare and Medicaid may not be beneficial in some cases. If you have a handicap or chronic disease, for example, you may be eligible for Medicare and pay a monthly premium in exchange. However, if you already have access to necessary health services through Medicaid, this may be unnecessary. Furthermore, Medicaid eligibility varies by state, meaning that you may have dual eligibility in one state but not in another.

Advantages

Both Medicare and Medicaid provide recipients with various healthcare benefits. 

Medicare parts A and B, which cover hospital and essential services, are automatically provided to all Medicare participants, whereas Parts C and D are optional. 

According to federal rules, states are required to provide certain Medicaid benefits, but they can choose to provide additional services to Medicaid recipients.

Fees

According to the Centers for Medicare and Medicaid Services, members must pay a monthly premium for Part B, which is typically $144.60 but can be more based on an individual's or a household's income. If Medicare recipients need to use hospital benefits, they will have to pay a deductible. 

Medicaid recipients may be charged either no monthly premium or a substantially lower monthly payment. According to the Medicaid website, out-of-pocket fees and deductibles vary by state, and the amount varies according to income.

Medicare is a government health insurance program for people who are 65 and older or those with certain disabilities or diseases. According to the official Medicare website, individuals with Medicare may be eligible for supplementary health insurance through their employers or private insurance alternatives. 

Eligibility requirements

The main Medicare requirement is age. When a person reaches age 65, they must enroll in Medicare (not Medicaid) although there are several exceptions or circumstances in which enrollment can be postponed. According to the American Association of Retired Persons, “you have the ability to delay enrolling in Medicare until your job or coverage ends (whichever comes first) as long as you have health insurance from an employer for which you or your spouse actively works after you turn 65.” Individuals have a special enrollment window when they turn 65, during which no late fees can be imposed. 

According to the Center for Medicare Advocacy, individuals younger than 65 can qualify for Medicare if they have received Social Security disability benefits for two years or have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS). Individuals with ESRD become eligible three months “after a course of regular dialysis begins or after a kidney transplant.” Individuals with ALS can apply as soon as they receive Social Security disability benefits. Dementia, mental illness, Alzheimer's disease, and multiple sclerosis are other diseases that may make a person under 65 eligible for Medicare.

Coverage

Medicare Parts A, B, C, and D are the four categories of healthcare coverage provided by Medicare.

1. Part A: Inpatient hospitalization, nursing facility care, hospice care, and home healthcare are all covered by Medicare Part A. Medicare benefits and services may differ depending on where you live and what national coverage and benefits are available at the time. National coverage decisions may be more expansive or condensed in some years than in others.
2. Part B: Part B of Medicare covers both medically essential and preventative services. All Medicare drug plans must generally cover at least two prescriptions per drug category, but plans can pick and choose which pharmaceuticals covered by Part D they will offer. Part D insurance is frequently bundled with Medicare Part C policies.
3. Part C: Part C, also known as Medicare Advantage Plans, is a health insurance program that offers all the benefits of Parts A and B but is provided by a commercial health insurance company. Particular out-of-pocket expenses for Part C can vary depending on whatever plan or partner an individual chooses. According to the US Department of Health and Human Services, Medicare Part C can provide extra benefits to those provided by Parts A and B, such as vision, hearing, dental, and/or health and wellness programs.
4. Part D: Prescriptions, both brand name and generic, are covered under Medicare Plan D, depending on the plan's specific restrictions. According to the Medicare website, “all Medicare drug plans must normally cover at least two medications per drug category,” but “plans can pick which pharmaceuticals covered by Part D they will offer.” Medicare Part D plans are sometimes included with Medicare Part C policies.

Medicaid is a federal and state-run healthcare program that covers low-income people, as well as pregnant women, the elderly, and people with disabilities. 

Eligibility requirements 

The income eligibility model changed under the Affordable Care Act and is now based on modified adjusted gross income. Medicaid income eligibility thresholds vary by state. 

Coverage

Medicaid offers two categories of benefits, required and optional, that are identical to Medicare benefits. The federal government mandates that all states provide mandatory benefits to Medicaid recipients. These services include hospital inpatient and outpatient care, home healthcare, laboratory and X-ray services, and transportation to medical appointments. 

Optional benefits are those that a state may choose to grant if it so desires. According to the Medicaid website, these optional benefits can include prescription medicines, eyeglasses, occupational therapy, and dental care. So a person living in one state may be eligible for both mandatory and voluntary Medicaid benefits. Only mandatory services, not optional ones, may be obtained by a person who is a resident in another state. A person who lives in a third state and earns the same amount of money as someone who lives in another state may not be eligible for Medicaid at all.