The short answer. Medicare is federal health insurance for people 65 or older or certain people with disabilities. It works the same way in every state and is funded through payroll taxes and premiums. Medicaid is a joint federal-state program for people with low income. Each state runs its own Medicaid program within federal rules, so benefits and eligibility differ by state. And yes, you can have both at the same time. That status is called dual eligible.
What is the difference between Medicare and Medicaid?
The quickest way to tell Medicare and Medicaid apart is to ask three questions:
- Who qualifies? Medicare is mainly based on age (65+), disability, or End-Stage Renal Disease. Medicaid is based on low income, and the rules vary by state.
- Who runs it? The federal government runs Medicare. States run Medicaid, with federal oversight and funding.
- What do you pay? Medicare has premiums, deductibles, and copays. Medicaid has little or no cost, depending on your state.
Age does not decide Medicaid, and income does not decide Medicare. A person can qualify for one, the other, or both. Medicaid applications are open all year. Medicare has set sign-up windows, and late sign-up can bring penalties. If you think you may qualify for both, read about dual-eligible coverage and Medicare Savings Programs, which help pay Medicare costs. The table below compares them line by line.
Side-by-side comparison
| Medicare | Medicaid | |
|---|---|---|
| Main eligibility rule | Age (65+) or disability or End-Stage Renal Disease (ESRD) | Low income; varies by state |
| Who runs it | Federal government (Centers for Medicare & Medicaid Services) | States (with federal oversight and funding) |
| How it's funded | Payroll taxes (Social Security taxes), beneficiary premiums, and general federal tax revenue | Federal and state tax revenue; each state decides its budget |
| Where rules are the same | Same rules nationwide | Different eligibility, benefits, and costs by state |
| Basic coverage | Hospital insurance (Part A), medical insurance (Part B), and prescription drug plans (Part D) | Comprehensive benefits; all states cover essentials, but coverage varies |
| Cost to you | Premiums, deductibles, and copays (amounts vary by plan and Part) | Little or no cost; varies by state |
| When you can apply | Must enroll when you turn 65 or meet disability criteria; penalties apply if you delay without good reason | You can apply any time of year |
What is Medicare?
Medicare is a federal health insurance program for people 65 and older and certain younger people with disabilities. It is run by the same agency (the Centers for Medicare & Medicaid Services) the same way in all 50 states. You do not qualify based on how much money you have. You qualify based on age or disability status.
Medicare comes in parts. Part A covers hospital stays, skilled nursing, and some home health care. Part B covers doctor visits and outpatient services. Most people on Medicare have both. Part D is prescription drug coverage, which is optional but recommended to avoid penalties. You can add Medigap or Medicare Advantage plans to fill gaps in what Medicare covers.
What is Medicaid?
Medicaid is a joint federal and state program that provides free or low-cost coverage to people with low income. The federal government sets the rules and contributes funding, but each state administers its own program and decides how much to spend. This means Medicaid eligibility, benefits, and how much coverage costs differ from state to state.
Medicaid covers low-income families and children, pregnant women, the elderly, and people with disabilities. You can apply for Medicaid any time of year through your state's Medicaid agency or through the Health Insurance Marketplace. If you are unsure whether you qualify, apply anyway—each state looks at income, household size, age, disability status, and other factors.
Dual eligible: having both Medicare and Medicaid
You are dual eligible when you qualify for both programs. This typically happens when you are 65 or older or have a disability that qualifies you for Medicare, and you also have income low enough to qualify for Medicaid in your state.
If you are dual eligible, you usually have Medicare as your primary coverage and Medicaid as secondary. Medicaid can help with Medicare costs: it may pay your Medicare premiums, deductibles, and copays. Some dual-eligible people can enroll in special plans designed to coordinate Medicare and Medicaid benefits for easier access to both. Learn more in our Dual Eligible guide.
What if my income or situation changes?
If your income rises above your state's Medicaid limit, you will lose Medicaid coverage. When that happens, you qualify for a Special Enrollment Period to enroll in a health plan on the Health Insurance Marketplace (HealthCare.gov or your state's marketplace). You have up to 90 days after Medicaid ends to pick a plan. Many people who lose Medicaid qualify for a premium tax credit that lowers the monthly bill. See Lost Medicaid? What Now for details.
If your Medicare coverage changes or you have other life changes (marriage, birth, moving), you may also qualify for a Marketplace Special Enrollment Period. Most life changes give you 60 days to enroll; losing Medicaid or CHIP gives you 90 days.
Common questions
Can I have both Medicare and Medicaid at the same time?
Yes. You are "dual eligible" when you qualify for both programs. This happens when you are 65 or older or have a disability that qualifies you for Medicare, and you also have income low enough to qualify for Medicaid. Some people who are dual eligible enroll in special plans designed to coordinate Medicare and Medicaid benefits. See Dual Eligible for more details.
Who administers Medicare and Medicaid?
Medicare is run by the federal government through the Centers for Medicare & Medicaid Services (CMS), the same for everyone in the country. Medicaid is jointly administered by the federal and state governments, with each state setting its own eligibility rules, benefits, and payment methods within federal guidelines. That is why Medicaid rules vary by state.
How are Medicare and Medicaid funded?
Medicare is funded through payroll taxes (Social Security taxes paid by workers and employers), premiums paid by beneficiaries, and general federal tax revenue. Medicaid is funded jointly by the federal government and individual states, with each state contributing its own funds. This is why Medicaid eligibility and benefits vary—each state decides how much it can spend.
If I turn 65, do I automatically get Medicare?
You are eligible at 65, but you do not automatically enroll. You need to sign up. If you are working and have job-based coverage, you can delay enrolling in Part B without penalty if your employer has 20 or more employees. If you do not have coverage from your employer, you should enroll when you become eligible to avoid lifetime penalties. See Enrollment & Deadlines for details.
Can I lose my Medicaid coverage?
Yes. Medicaid coverage ends if your income rises above your state's limit, your household size changes, or you fail to renew your eligibility during a required renewal period. Each state runs its renewals differently. If you lose Medicaid, you may qualify for a Special Enrollment Period to buy a plan on the Health Insurance Marketplace for up to 90 days. See Lost Medicaid? What Now for next steps.
Related MediPrimer guides
- Dual Eligible: Having Both Medicare and Medicaid
- Medicare and Medicaid Explained in Chinese
- 白卡 and 紅藍卡: What Medicaid and Medicare Actually Mean
Official sources
- HealthCare.gov: Medicare (definition and basics)
- HealthCare.gov: Medicaid & CHIP coverage (eligibility and how to apply)
- Medicaid.gov (federal-state overview)
- CMS.gov (Centers for Medicare & Medicaid Services)
- HealthCare.gov: Special Enrollment Periods (changes to Medicaid status)