Medicare and Medicaid are both government sponsored health insurance programs with one big difference – who they cover. Medicare is primarily health insurance for people 65 and older, and Medicaid coverage is based primarily on income and asset limits.

Let’s take a deeper look at the other differences between Medicare and Medicaid, including what they cover, how you can qualify for one or both programs, and which program is right for you.

Key differences between Medicare and Medicaid

You can be dually eligible for Medicare and Medicaid, so they’re often grouped together. But these programs are quite different. Both provide health insurance benefits, but eligibility and coverage vary depending on your individual situation.

What is Medicare?

Medicare is a federal program available to people 65 years and older or people under age 65 with certain health conditions and disabilities. Also called Original Medicare, it helps enrollees pay for the cost of their health care. This includes hospital costs (Medicare Part A) and medical costs (Medicare Part B).

Because Original Medicare only covers Parts A and B, many people opt to enroll in a Medicare Advantage plan (Part C) through a private company approved by Medicare.

Medicare Advantage plans provide the same coverage as Original Medicare (Parts A and B), but they’re also designed to provide additional benefits beyond Original Medicare such as hearing, dental, vision and prescription medications (Medicare Part D).

What is Medicaid?

Medicaid is a federal and state program that provides free or low-cost coverage to low-income individuals or families. Unlike Medicare, eligibility is primarily based on yearly income instead of age or health status, with a few exceptions. Medicaid helps pay for health care, assisted living and nursing home care, and home and community-based services. In Minnesota, the Medicaid program is called Medical Assistance.

Medicare is a federal program, Medicaid is federal and state

Medicare is a federal program, administered by the Centers for Medicare and Medicaid Services (CMS). It's funded through a combination of income and payroll taxes, health care premiums paid by beneficiaries, funds authorized by Congress and federal trust funds.

Medicaid is a joint state and federal program and is funded by both. The federal government sets broad rules and regulations, but it’s up to individual states to determine the program design, who’s eligible and how benefits are administered.

How to qualify for Medicare vs. Medicaid

Medicare and Medicaid serve similar purposes, but how you qualify is very different. Medicare eligibility is primarily determined by age, and Medicaid eligibility is primarily determined by individual and family income and asset limits. Let’s look at the other requirements and when you can apply.

Who’s eligible for Medicare and when can you apply?

To be eligible to enroll, Medicare requires that:

  • You’re age 65 or older
  • You’re a U.S. citizen or legal resident
  • You’re under 65 and have a qualifying disability, like end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS)

You can apply for Medicare during the following enrollment periods:

  • Medicare Initial Enrollment Period (IEP) – You have a seven-month window to enroll that starts three months before you turn 65 and ends three months after your birthday month. This is your first and primary opportunity to enroll in Medicare.
  • Medicare General Enrollment Period (GEP) – Medicare GEP is from Jan. 1 to March 31 with coverage beginning July 1 each year. This is an opportunity to enroll in Medicare if you missed your IEP, don’t qualify for a special enrollment period or you didn’t enroll in Part A and/or Part B when you were first eligible. If you don’t qualify for a special enrollment period, you may have to pay a penalty when you enroll.
  • Medicare Annual Enrollment Period (AEP) – Medicare AEP runs from Oct. 15 to Dec. 7 each year. The AEP is your chance to change your Medicare choices after your IEP. This means you can join, switch or drop coverage for Original Medicare, Medicare Advantage, Medicare Cost and Medicare Part D prescription drug coverage, without risking a penalty.
  • Medicare Special Enrollment Period (SEP) – SEPs exist outside of other enrollment periods so you can make changes to your current Medicare plan or enroll for the first time. To qualify, you must meet certain criteria. This includes a qualifying life event, like moving to a new area or losing health care coverage. You can also qualify for an SEP if you delayed enrolling in Medicare at 65 due to having creditable health coverage, like from an employer.

Who’s eligible for Medicaid and when can you apply?

Medicaid eligibility varies by state, but it depends on one or a combination of factors, including:

  • Income level
  • Number of people in your household
  • If you’re pregnant
  • If you have a qualifying disability
  • You’re 65 or older

Medicaid enrollment is available any time of the year. To see if you’re eligible and to apply for Medicaid, go to your state Medicaid website. You can also check out our Seniors’ Guide to Medicaid to learn more about coverage and benefits.

Are both Medicare and Medicaid eligibility based on age?

Unlike Medicare, Medicaid eligibility is not primarily based on age. But in some states, people 65 and older may qualify for Medicaid based on certain disabilities, not income and asset level.

Medicare vs. Medicaid: What’s covered?

While the requirements of each program are different, both Medicare and Medicaid provide health care coverage in slightly different ways.

What Medicare covers

There are four parts to Medicare: Part A, Part B, Part C and Part D. Parts A and B are called Original Medicare and provide hospital and medical coverage that’s considered medically necessary.

  • Part A (hospital coverage) – This includes inpatient hospital stays, home health care visits and some nursing facility care.
  • Part B (medical coverage) – This includes doctor visits, outpatient services, X-rays, preventive screenings and diagnostics and lab tests.
  • Part C (Medicare Advantage plans) – These are administered by private health care companies and are for people who want more coverage than Original Medicare, along with extra benefits like dental, vision, hearing and more.
  • Part D (prescription drug coverage) – Part D plans can help offset the cost of prescription medications and are usually combined with Medicare Advantage plans. You can also enroll in a standalone Medicare Part D plan.

What Medicaid covers

Every state establishes and administers their own Medicaid program. Within the program, there are mandatory benefits each state must provide according to federal law, and there are optional benefits that may be covered at the discretion of the individual state.

Mandatory benefits that a state Medicaid program must cover include:

  • Inpatient and outpatient hospital services
  • Labs, diagnostics and X-ray services
  • Doctor visits and services
  • Select home health services

Optional benefits that states may but aren’t required to include are:

  • Coverage for medications and prescription drugs
  • Physical therapy
  • Occupational therapy
  • Dental and vision services
  • Hospice services

Prescription drug coverage: Medicare Part D vs. Medicaid

If you’re like many people, you need coverage for prescription medications. Both programs have prescription drug coverage, but they treat them in very different ways.

Medicare Part B only covers prescription medications and vaccines that are given to you by a doctor, and select other medications that aren’t typically self-administered and part of outpatient treatment. If you want more robust prescription drug coverage, you’ll need to enroll in a plan with Medicare Part D coverage or a standalone Medicare Part D plan.

A Part D plan can be purchased by itself or included as part of a Medicare Advantage plan. It offers more coverage for the vaccines and medications that people with Medicare typically need to take, like those to treat chronic health conditions.

Keep in mind that to enroll in a standalone Part D plan, you need to already be enrolled in Original Medicare. And even though enrollment isn’t mandatory, if you don’t enroll in a Part D plan when you initially become eligible for Medicare, you may have to pay a penalty.

When it comes to Medicaid, according to federal law, prescription drug coverage is considered an optional benefit, so check with your state. But as of 2025, all states provide at least some form of coverage for prescription drugs to those who qualify.

Do Medicare or Medicaid include dental coverage?

With dental coverage, care can be comprehensive or emergency. Comprehensive coverage is for continuous care to improve oral health, while emergency coverage deals with sudden pain, injury or infection in the mouth.

Comprehensive dental coverage isn’t included in Original Medicare, and dental services aren’t typically covered unless they’re considered an emergency or medically necessary. This includes things like getting an exam to see if you have good oral health before a surgery or a transplant. If you want comprehensive dental coverage, you’ll need to purchase a Medicare Advantage plan (Part C).

With Medicaid, most states will provide emergency dental services to adults 21 and older, but it’s up to each individual state to determine if they offer comprehensive or other coverage. For adults and children 21 and younger, Medicaid is required to provide emergency dental services, as well as more comprehensive dental care for those eligible.

Medicare vs. Medicaid: Average costs and what you’ll pay out of pocket

Medicare costs depend on the plan you’re enrolled in and services that you receive. Medicaid costs depend primarily on income and individual situation.

Medicare costs and what you might pay

Medicare makes changes each year, and that can include what you’ll pay for services. Typically, costs include:

  • Monthly premium payments – You won’t have to pay a monthly premium for Part A if you or your spouse worked long enough and paid into Medicare taxes. But if you don’t qualify for premium free Part A, you may be able to purchase coverage. The cost for Part B is set, but it can change each year and may be higher depending on your income. And Parts C and D premiums vary depending on the plan you choose.
  • Deductible – This is how much you’ll pay for a covered service before Medicare steps in to help.
  • Co-pays and coinsurance – What you pay once you’ve met your deductible, then your insurance pays the rest.

If you have limited income and resources, you may qualify for programs that can help with paying for Medicare costs. There are four Medicare Savings programs that can help you pay for Part A and B premiums, plus other costs. And the Medicare Part D Extra Help program can offset prescription drug costs.

Medicaid costs and what you might pay

Medicaid is generally low-cost and even free, and because it supports people with a lower income, it doesn’t usually include monthly premiums. However, depending on the state and benefits received, you may have to pay a deductible, copay or coinsurance for services received – but it’s likely a small amount.

Some groups are protected from cost-sharing, including children and people who are in institutions such as nursing homes. There are also some services that Medicaid can’t charge you for, including:

  • Children’s preventive services
  • Emergency medical services
  • Family planning services
  • Maternity and pregnancy care

With Medicaid, coverage can’t be withheld if you can’t pay. But you’ll still be responsible for payment on services received.