Medicare vs Medicaid: What’s the difference?

Medicare vs Medicaid

Medicaid and Medicare are designed for people who are interested in getting federal assistance for healthcare. Both programs are well known, but many people confuse one with the other. Some think that there are only a few differences that are not important. It’s important to know more of the differences between Medicare vs Medicaid so that you choose the right one to work with.

Types of Customers

Medicaid is primarily designed to help people with low incomes and limited resources. Candidates are eligible if they meet federal poverty level (FPL) numbers and other requirements, such as age or disability.

Common recipients are children and their parents, seniors in need of nursing homes, disabled people and pregnant women. Participants in the Supplemental Security Income (SSI) program, which provides federal cash assistance, may also be eligible for Medicaid.

Medicare mainly helps seniors who are 65 years or older. They must be working or have worked and paid for coverage through taxes. Also covered are people of all ages with certain illnesses or disabilities who meet the qualifications set by the Social Security Administration.

Learn About the Types of Benefits

The Medicare vs Medicaid similarities include many coverage options for health insurance, hospital visits and prescription drugs. Medicaid helps a wider range of people and provides more options than Medicare. The program provides comprehensive insurance coverage for many low-income children and prescription drug coverage for people living with HIV/AIDS.

In general, Medicare covers hospital bills, medical insurance, supplemental insurance and prescription drugs. Medicaid has additional options for dental, vision and physical therapy coverage. There is long-term care for nursing home residents that is not provided by Medicare.


Medicare vs Medicaid costs vary widely by the type of plan chosen and the individual needs of policyholders. Since Medicaid users are low income, their premiums and deductibles are low cost.

The state determines the costs for deductibles and copayments, which vary based on income. Recipients are not charged out of pocket for emergency, pregnancy, terminally ill and children’s preventative healthcare services.

Medicare coverage is divided into four parts:

  • Part A – hospital care
  • Part B – medical insurance
  • Part C – managed healthcare
  • Part D – prescription drugs

Medicare recipients do not pay anything for Part A premium coverage if they paid taxes for 10 years. The costs for Part B, C and D coverage vary with each plan. The Part C plan requires out-of-pocket costs that vary based on the premium payment and the type of coverage needed.

Find Out About Government Funding

Medicaid and Medicare are both managed by the federal government; however, Medicaid is also managed by the state government. The state must comply with federal regulations to receive grants. Medicare is mostly funded by payroll taxes that are paid by the recipients.

Medicare vs Medicaid: Similar but with a Few Important Differences

Many people confuse Medicaid with Medicare or think that both programs are essentially the same. Both programs help disabled people of all ages if they qualify, and the names are similar along with several eligibility requirements, so some people are enrolled in both Medicare and Medicaid.

Despite the similarities, there are important differences that make each program separate and unique. Be able to compare Medicare vs Medicaid to see which one is right for your healthcare needs.