Medicare vs. Medicaid: Eligibility and Key Differences

Medicare and Medicaid are both federal health insurance programs for retirees, those with low incomes, and people with disabilities.

Medicare vs. Medicaid

The main difference between Medicare and Medicaid is who the programs serve. Medicare is usually for those age 65 and older or with certain medical conditions. Medicaid is designed for people with lower incomes. Eligibility for Medicaid is determined based on the state in which you live, your income, and your family size.¹

Unlike Medicare, Medicaid is not limited by age. Adults with low incomes, children, pregnant women, and people with disabilities may also qualify.

Let's delve a little deeper into each program.

Medicare Eligibility

Medicare is usually for those ages 65 or older, and for people who have a disability or specific medical condition, such as kidney failure, or amyotrophic lateral sclerosis (ALS/Lou Gehrig's disease).

What Are Medicare “Parts?"

Medicare consists of different programs, called “parts." Each part covers a particular type of care and each has a different costs associated with it.

• Medicare Part A pays for hospital care, nursing home care, and home healthcare. Nursing homes and home healthcare are only covered under limited circumstances.
• Medicare Part B pays for other types of medical care, including doctor visits, diagnostic medical tests, and medical equipment.

Medicare Parts A and B together are often referred to as “original Medicare" and are managed by the federal government.

• Medicare Part C is also known as Medicare Advantage. It is a type of Medicare plan you can buy from private companies that contract with Medicare. These plans include Parts A and B and often add in additional coverage and services, such as dental and vision coverage, weight loss programs and other tools to help manage health. It often also includes Part D coverage for prescription drugs.
• Medicare Part D: Provides prescription drug coverage and is usually included with Part C in Medicare Advantage plans.

Some Medicare recipients may want additional health insurance coverage, such as a Medigap plan, to supplement traditional Medicare. Medigap plans can pay for additional services that traditional Medicare does not cover or provide help paying some of traditional Medicare's coinsurance costs. You can buy Medigap plans along with Medicare Parts A, B, and D.²

How to Apply for Medicare

You can apply for Medicare online through the Social Security Administration. You can enroll starting three months before your 65th birthday, and up to three months after. If you decide not to sign up for Medicare Part B or Medicare Advantage/Part C when you first enroll, you can always change your plan during the general enrollment period each year, which runs from January 1 to March 31.³

Those with kidney failure can apply for Medicare anytime, and may even get retroactive coverage for up to a year prior.⁴ You can find the special rules for those with kidney disease here. Those with ALS are subject to a five-month waiting period before Medicare coverage kicks in. You can find the special rules for those with ALS here.

What Is Medicaid?

Medicaid is a program co-run by the federal government and states. It provides health insurance for people with low incomes.

Who Is Eligible for Medicaid?

Medicaid eligibility varies by state. There are a few additional factors that must meet certain federal guidelines, including income requirements, family size and the level of benefits.

There are a couple different ways to find out if you are eligible for Medicaid. You can fill out a Health Insurance Marketplace application at HealthCare.gov, or you can use this handy tool on HealthCare.gov.

How to Apply for Medicaid

When you fill out a Health Insurance Marketplace application at HealthCare.gov you may also be considered for Medicaid, or you can use this tool on HealthCare.gov to learn if you may be eligible. If you qualify, your information will be sent to the appropriate state agency, and they will contact you about enrollment.

You may also apply or get more information about your eligibility through your state's social services office. You can find your state's office here. In most states, you can enroll in person or online.

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Our Expert Reviewer

Patty Caballero and her team of consultants together have more than 35 years of health insurance knowledge working for some of the biggest health insurance companies in the US. She has knowledge in building brands and strategic initiatives to help consumers better understand their health benefits.