What's the Difference Between Medicare and Medicaid?

Key takeaways

• Maximize your health coverage by understanding Medicare and Medicaid differences, as Tricia Sandiego explains.
• Determine eligibility based on age or disability for Medicare, income and household size for Medicaid.
• Reduce stress and avoid costly mistakes by taking steps Tricia Sandiego recommends for enrollment and benefits.

Summary

Understanding the difference between Medicare and Medicaid is crucial when planning your health care coverage, especially as you approach retirement age or navigate limited income situations. Medicare is a federal health insurance program primarily for people 65 and older or those with certain disabilities, offering standardized coverage nationwide. On the other hand, Medicaid is a joint federal and state program that provides health insurance to millions of Americans with limited income, including children and people with disabilities — though eligibility and benefits vary by state.

Tricia Sandiego highlights that knowing whether you qualify for Medicare or Medicaid — and how to take the next steps — helps you get the care you need without unnecessary stress. While Medicare eligibility is based on age or disability, Medicaid focuses on income and household size. Taking the time to understand these distinctions ensures you maximize your health benefits, avoid costly mistakes, and gain peace of mind about your coverage options.

The key takeaways and summary were created with the assistance of generative AI. An AARP editor reviewed and refined the content for accuracy and clarity.

Full Transcript:

[00:00:00] Medicare and Medicaid. They sound similar, right? Yes, they’re both government health insurance programs, but there

[00:00:06] are some important differences between them that could affect you. So what is the difference between Medicare and Medicaid,

[00:00:13] and what makes them each unique? Let’s kick things off with Medicare. Also known as original Medicare or traditional Medicare.

[00:00:22] It’s a federal health insurance program for Americans 65 and older and those with certain disabilities.

[00:00:29] A couple key things to note: Medicare eligibility is based on your age. You have to be at least 65.

[00:00:36] It isn’t based on income, unlike Medicaid. But like Medicaid, you can’t be denied Medicare coverage due to preexisting

[00:00:45] conditions, which is important to know. We’ll dig into this a little bit more, don’t worry. OK. Let’s talk about Medicaid.

[00:00:53] The program provides health insurance for millions of Americans with limited incomes, including children and people with disabilities.

[00:01:00] Unlike Medicare, which is a federal program, Medicaid is managed jointly by federal and state governments, which means eligibility and coverage details can

[00:01:10] vary significantly from state to state. Now that we know what these programs are, let’s look at what’s covered by each one.

[00:01:18] Medicare offers a broad range of services and is broken down into Part A and part B.

[00:01:24] Part A helps with inpatient hospital stays and skilled nursing facility care. Part B covers outpatient services, diagnostic tests and preventive care.

[00:01:36] One thing I’d like to point out: Unlike Medicaid, Medicare doesn’t automatically cover prescriptions.

[00:01:43] You’ll need to enroll in a program called Medicare Part D for that. As for Medicaid, it too provides a broad range of services,

[00:01:53] including doctor visits, hospital care and home health care. Many states also cover additional services that aren’t included under Medicare,

[00:02:02] like dental care and prescription drugs. But these can differ based on where you live. So now you’re wondering, Who qualifies for these programs?

[00:02:13] Great question. Like I mentioned earlier, Medicare eligibility isn’t based on income,

[00:02:19] while Medicaid is. But there are other factors that set them apart. For Medicare, you’re eligible at 65 if you’ve been a U.S. citizen or permanent

[00:02:30] resident for at least 5 years. You can also qualify if you’re younger than 65.

[00:02:36] But only if you’re disabled and you’ve received financial assistance under a program called Social Security Disability Insurance for 24 months.

[00:02:46] One note here: There are more life-threatening medical conditions such as ALS or end stage renal disease that qualify some for eligibility faster.

[00:02:56] Medicaid eligibility is more variable and typically hinges on not just your income,

[00:03:03] but household size and sometimes assets. States have different criteria, but generally if you’re low-income, under

[00:03:11] 18 or pregnant, you may qualify. So what about costs? Unfortunately, most of this is not free.

[00:03:20] Just like health insurance that you may get through an employer, there could be premiums and copays associated with

[00:03:26] both Medicare and Medicaid. For Medicare, most people don’t pay a premium for Medicare Part A, but they do

[00:03:35] for Part B. That varies from year to year. For instance, in 2025, the standard monthly premium is $185.

[00:03:45] This will likely go up in the future. In contrast, Medicaid generally has very low or no costs, but small copayments

[00:03:54] might apply based on your income. One last thing. If you want to enroll, you should know that Medicare has

[00:04:01] specific enrollment periods. You can enroll in Medicaid any time through your state

[00:04:07] agency or healthcare.gov. For more detailed information about eligibility and coverage, visit aarp.org/medicare.

[00:04:15] And subscribe to our YouTube channel to stay informed on the latest health care updates from AARP.