Medicare vs Medicaid: What's the Difference?

Medicare and Medicaid sound similar, get confused constantly, and are completely different programs. Medicare is federal health insurance based on age or disability. Medicaid is a state and federal program based on income. About 12 million Americans qualify for both and are called "dual eligibles."

Medicare: Age-Based Federal Insurance

Medicare covers Americans 65 and older, plus younger people with certain disabilities (after a 24-month waiting period) or end-stage renal disease. It's funded through payroll taxes, premiums, and general federal revenue. About 67 million people are enrolled. Medicare is the same everywhere in the country. Your benefits don't change based on which state you live in.

In 2026, the standard Part B premium is $202.90 per month. Part A is premium-free for most people. You'll pay deductibles and 20% coinsurance for most Part B services.

Medicaid: Income-Based State Program

Medicaid covers low-income Americans of any age. It's jointly funded by federal and state governments, and each state runs its own program with different eligibility rules, benefits, and provider networks. About 79 million people are enrolled in Medicaid and CHIP combined. In states that expanded Medicaid under the ACA, adults earning up to 138% of the federal poverty level qualify. Non-expansion states have stricter criteria.

Medicaid typically covers more than Medicare with lower or no cost-sharing. Most Medicaid beneficiaries pay little to nothing for covered services, including dental and long-term care that Medicare doesn't cover.

Dual Eligibles: Both Programs at Once

About 12 million Americans qualify for both Medicare and Medicaid. These "dual eligibles" are typically low-income seniors or younger people with disabilities. For these individuals, Medicare is the primary insurer and Medicaid fills the gaps, covering premiums, deductibles, copays, and services Medicare doesn't include like long-term care and dental.

The Key Differences at a Glance

Eligibility: Medicare is based on age (65+) or disability. Medicaid is based on income. Funding: Medicare is federal. Medicaid is federal and state. Cost to you: Medicare has premiums, deductibles, and coinsurance. Medicaid has minimal or no cost-sharing. Coverage: Medicare has gaps (no dental, vision, long-term care). Medicaid is more comprehensive. Provider access: Medicare is accepted almost everywhere. Medicaid acceptance varies, with some providers not taking it due to lower reimbursement rates.