Medicare guide: What’s the difference between Medicare and Medicaid?
By: Alice Gomstyn
Not sure how Medicare and Medicaid are different? You're not alone. These two government-funded health insurance programs have similar names and offer overlapping insurance benefits, so it's easy to get confused. But there are key differences between the two. Whether you qualify for one, the other or both, it's helpful to know what makes each program unique. Here are the key differences between Medicare and Medicaid:
The difference between Medicare and Medicaid
While both programs exist to provide health coverage, the difference between Medicare and Medicaid lies primarily with the kinds of people they serve. Here is a simple breakdown:
What is Medicare?
Medicare serves adults over the age of 65, as well as some with specific disabilities who are younger. It provides health coverage regardless of income level.
What is Medicaid?
Medicaid provides health coverage generally based on income level. Each state has its own requirements, though it mostly serves people below a certain income, and some who are eligible based on children, pregnancy and disabilities.
You can reference the chart below to learn more about what sets these two programs apart.
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|
|
Medicaid |
|---|---|---|
|
Who funds it? |
The federal government |
The federal and state governments |
|
Who administers it? |
The federal government (Original Medicare) Private insurance companies (Medicare Advantage) |
State governments |
|
Is there variety among plans? |
Consumers can choose to receive Original Medicare (Medicare Parts A & B). Or they can choose to receive a Medicare Advantage plan (Medicare Part C). This is an alternative way to get Original Medicare. Medicare Advantage plans can offer benefits that Original Medicare does not, including dental, vision and hearing services, prescription drug coverage and fitness club memberships. What’s offered depends on where you live. |
There are two different types of plans: traditional and managed care. Some states offer both types. In a traditional plan, health care providers charge the state for every service a patient receives. In a managed care plan, benefits and services are delivered through insurers such as Aetna®. Learn more about Aetna Medicaid plans here: AetnaBetterHealth.com |
|
Who is eligible? |
People who are 65 or older, younger people with a qualifying disability and people with end-stage renal disease are eligible for Medicare. |
People who have a disability or who meet income and family size eligibility requirements, which vary by state, are usually eligible for Medicaid. |
|
How do you apply? |
You can apply for Medicare through the Social Security Administration. |
You can apply for Medicaid through HealthCare.gov or your state's Medicaid website: Medicaid.gov If you don’t choose a plan, one may be automatically assigned to you. |
|
What does it cost? |
Medicare recipients may be responsible for out-of-pocket costs, such as premiums and copays, depending on their plan. States offer Medicare Savings Programs that can help cover some of these costs. |
Most Medicaid recipients pay nothing for medical coverage, though vision and dental coverage may require copays. Those receiving Medicaid through Medicaid expansion programs may be responsible for additional costs. Learn more about Medicaid expansion programs, which allow states to expand Medicaid eligibility beyond traditional requirements. |
|
What are the coverage differences? |
For Medicare, coverage varies depending on whether consumers choose Original Medicare or a Medicare Advantage plan |
Medicaid may offer benefits that Medicare may not, such as covering the cost of long-term nursing home care and home health care services. |
|
How often do you need to apply? |
Medicare recipients only need to apply once. Those eligible for Medicare due to age may apply as early as three months before the month of their 65th birthday. Those who choose a Medicare Advantage plan will need to enroll annually. |
Medicaid recipients must recertify every year by proving they meet eligibility requirements. |
Who funds it? |
|
Medicare |
The federal government |
Medicaid |
The federal and state governments |
Who administers it? |
|
Medicare |
The federal government (Original Medicare) Private insurance companies (Medicare Advantage) |
Medicaid |
State governments |
Is there variety among plans? |
|
Medicare |
Consumers can choose to receive Original Medicare (Medicare Parts A & B). Or they can choose to receive a Medicare Advantage plan (Medicare Part C). This is an alternative way to get Original Medicare. Medicare Advantage plans can offer benefits that Original Medicare does not, including dental, vision and hearing services, prescription drug coverage and fitness club memberships. What’s offered depends on where you live. |
Medicaid |
There are two different types of plans: traditional and managed care. Some states offer both types. In a traditional plan, health care providers charge the state for every service a patient receives. In a managed care plan, benefits and services are delivered through insurers such as Aetna®. Learn more about Aetna Medicaid plans here: AetnaBetterHealth.com |
Who is eligible? |
|
Medicare |
People who are 65 or older, younger people with a qualifying disability and people with end-stage renal disease are eligible for Medicare. |
Medicaid |
People who have a disability or who meet income and family size eligibility requirements, which vary by state, are usually eligible for Medicaid. |
How do you apply? |
|
Medicare |
You can apply for Medicare through the Social Security Administration. |
Medicaid |
You can apply for Medicaid through HealthCare.gov or your state's Medicaid website: Medicaid.gov If you don’t choose a plan, one may be automatically assigned to you. |
What does it cost? |
|
Medicare |
Medicare recipients may be responsible for out-of-pocket costs, such as premiums and copays, depending on their plan. States offer Medicare Savings Programs that can help cover some of these costs. |
Medicaid |
Most Medicaid recipients pay nothing for medical coverage, though vision and dental coverage may require copays. Those receiving Medicaid through Medicaid expansion programs may be responsible for additional costs. Learn more about Medicaid expansion programs, which allow states to expand Medicaid eligibility beyond traditional requirements. |
What are the coverage differences? |
|
Medicare |
For Medicare, coverage varies depending on whether consumers choose Original Medicare or a Medicare Advantage plan |
Medicaid |
Medicaid may offer benefits that Medicare may not, such as covering the cost of long-term nursing home care and home health care services. |
How often do you need to apply? |
|
Medicare |
Medicare recipients only need to apply once. Those eligible for Medicare due to age may apply as early as three months before the month of their 65th birthday. Those who choose a Medicare Advantage plan will need to enroll annually. |
Medicaid |
Medicaid recipients must recertify every year by proving they meet eligibility requirements. |
Are you dual eligible for Medicare and Medicaid?
Are you dual eligible for Medicare and Medicaid?
About 12.5 million people are dual eligible, meaning they’re eligible to enroll in both Medicaid and Medicare. Dual enrollees typically use Medicare as their main form of coverage, while Medicaid serves as their supplemental health insurance.
Not everyone who is dual eligible receives the same level of coverage:
- Those who are "full dual eligible" are enrolled in Medicare and receive full Medicaid benefits.
- Those who are "partial dual eligible" are enrolled in Medicare and receive assistance from Medicaid to pay Medicare premiums.
Aetna® Medicare offers a Dual Special Needs Plan that features additional benefits, such as more dental, vision and prescription drug coverage, as well as transportation to doctor appointments.
It's important to understand the ins and outs of government-funded health insurance plans and make sure you're getting the most of the plan or plans you're eligible for. Learn more:
What are the parts of Medicare and what do they cover?
Medicare has four parts — Original Medicare, which accounts for two of these parts (A and B), Medicare Advantage (Part C) and Prescription Drug Coverage (Part D).
- Part A of Original Medicare covers services for hospital stays and other inpatient care.
- Part B of Original Medicare covers doctor visits and procedures or services that do not require overnight stays.
- Part C (Medicare Advantage) includes plans from private insurance companies approved by Medicare.
- Part D (Prescription Drug Coverage) provides prescription drug benefits.
Learn more about the four parts of Medicare.
