Key takeaways

  • Medicare is primarily for adults 65 and older or those with specific disabilities, while Medicaid is mainly for children, adolescents, and adults with limited income.
  • Medicare typically has higher premiums, deductibles, and coinsurance, whereas Medicaid offers lower or no out-of-pocket costs, with certain groups exempt from these costs.
  • Medicare enrollment has specific periods, but you can apply for Medicaid at any time by contacting your state’s agency or completing a Health Insurance Marketplace application.

Medicaid and Medicare are often confused or used interchangeably. Although they sound similar, these two programs are actually very different.

Each is regulated by its own set of laws and policies, and the programs are usually designed for different sets of people. However, it’s possible to be eligible for both programs.

2026 Medicare changes

We’re currently updating this article to reflect 2026 costs and other changes.

Read about what’s changing: Open Enrollment for Medicare: Key Changes to Know About Your Plan

Different agencies administer Medicare and Medicaid.

Medicare

The federal government provides Original Medicare (Parts A and B). Private insurance companies contract with the federal government to offer Medicare Advantage (Part C) and stand-alone prescription drug (Part D) plans.

Medicare is financially supported by two dedicated trust funds held by the U.S. Treasury. Workers pay into these funds through payroll taxes.

The Hospital Insurance Trust Fund supports Part A, while the Supplementary Medical Insurance Trust Fund supports Part B, Part D, and the overall administration of Medicare.

Part C is funded through a combination of government payments to private insurers and premiums paid by beneficiaries.

Medicaid

Medicaid is a joint federal and state program. State governments establish and administer the program according to federal requirements, securing federal funding.

The federal government pays states for a specific percentage of program expenses, called the Federal Medical Assistance Percentage (FMAP).

The federal government also provides “disproportionate share hospital (DSH)” payments to hospitals that support many Medicaid beneficiaries.

Eligibility requirements vary between Medicare and Medicaid.

Medicare

In most cases, Medicare eligibility is based on age. All U.S. citizens and permanent residents of at least 5 years are eligible for Medicare at age 65.

You may qualify for Medicare before age 65 if you have:

Medicaid

Eligibility for Medicaid in each state is based primarily on income.

The Affordable Care Act established a minimum income threshold based on Modified Adjusted Gross Income (MAGI) that’s used to determine financial eligibility for:

MAGI is a combination of:

  • adjusted gross income (AGI)
  • tax-exempt interest
  • Social Security benefits not included in gross income
  • excluded foreign income

To determine eligibility, MAGI is compared to the federal poverty level (FPL) for the household size claimed on your taxes.

Forty states and Washington, D.C., have expanded Medicaid to cover people under 65 with incomes at or below 133% of the FPL.

The 2025 FPL for most people has been:

  • $15,650 for an individual
  • $21,150 for a household of two
  • $26,650 for a household of three
  • $32,150 for a household of four

FPL amounts are higher in Alaska and Hawaii.

Some states have also expanded Medicaid eligibility to better cover specific groups. For example, all but four states have extended Medicaid coverage to pregnant people with incomes above the currently required level.

Original Medicare, Medicare Advantage (Part C), and Medicaid cover a variety of inpatient and outpatient medical services, including hospital stays, doctor’s visits, and preventive care.

Original Medicare is made up of two separate plans:

  • Part A (hospital insurance)
  • Part B (medical insurance)

You can purchase a Part D plan for prescription drug coverage. You can also purchase a supplemental Medigap plan to reimburse some of your out-of-pocket costs.

Medicare Advantage is considered an all-in-one alternative to Original Medicare because it bundles Part A, B, and D coverage into one policy.

Many Medicare Advantage plans cover additional services, such as dental, vision, and hearing, that aren’t included in Original Medicare. Some plans also cover gym memberships and other health and wellness benefits.

Medicaid offers benefits that Medicare typically doesn’t cover, like long-term nursing home care and personal care services.

Like Medicare Advantage, some Medicaid plans cover additional services such as prescription drugs, dental, vision, and physical therapy.

Medicare is usually more expensive than Medicaid.

Medicare

Most people do not have to pay a monthly premium for Medicare Part A.

However, you’ll still have to meet a deductible for each benefit period and pay coinsurance costs or copayments for covered services.

Everyone with Medicare is required to pay the Part B monthly premium. Your premium may be higher depending on your income.

After you meet the Part B annual deductible, you’ll generally pay 20% of all Medicare-approved costs for covered services.

Part C and Part D plans set their own cost and coverage amounts. The premiums, deductibles, copayments, and coinsurance amounts you’ll pay depend on your chosen plan.

Medicaid

Unlike Medicare, Medicaid is specifically designed to provide people with no or low income access to healthcare. Out-of-pocket costs are intentionally low with Medicaid.

The total out-of-pocket costs for a household are capped at 5% of the household’s income. This includes premiums, copayments, and coinsurance.

Beneficiaries with incomes at or below 150% of the FPL are not charged premiums. Certain groups, such as children and pregnant people, are exempt from most out-of-pocket costs.

Some services are also provided at no out-of-pocket cost, including emergency services, family planning services, and preventive care for children.

If you’re dually eligible for Medicare and meet certain income requirements, Medicaid may also cover the cost of your Medicare premiums, deductibles, coinsurance, and copayments.

Unless you’re eligible for a special enrollment period, you can only enroll in Medicare at certain times of the year:

  • Initial Enrollment Period (IEP): This lasts for seven months — three months before your 65th birthday, your birth month, and three months after.
  • Open Enrollment Period (OEP): From October 15 to December 7, you can enroll, switch plans, or drop coverage.
  • Medicare Advantage OEP: If you’re already enrolled in a Medicare Advantage plan, you can make changes from January 1 to March 31.
  • Medigap OEP: You have six months after turning 65 to enroll in Medigap.

You can apply for Medicare online, at your local Social Security Office, or by calling Social Security at 1-800-772-1213 (TTY: 1-800-325-0778). Help is available from 8 a.m. to 7 p.m. local time on weekdays.

You can enroll in Medicaid at any time. You can contact your state’s Medicaid agency or complete a Health Insurance Marketplace application to get started.

Medicare supports adults ages 65 and older, as well as younger individuals with certain health conditions and disabilities. Medicaid primarily supports children, adolescents, and adults with limited income or resources.

If you have questions about your eligibility or enrollment, contact your local State Health Insurance Assistance Program (SHIP) for free personalized health insurance counseling.

Call the SHIP National Technical Assistance Center at 1-877-839-2675 to find a program near you.