What’s the Difference Between Medicare and Medicaid?

Medicare and Medicaid are two of America’s largest health insurance programs, but they’re often mistaken for each other. “People don’t know the difference between them and use the terms interchangeably,” says Josh Hodges, the chief impact officer at the National Council on Aging.

Though both are government health insurance programs, Medicare and Medicaid each have their own rules, eligibility requirements, and benefits packages.

What Is Medicare?

• Part A (Hospital Insurance) This covers inpatient hospital care, skilled nursing facility care, hospice care, and home healthcare.
• Part B (Medical Insurance) This covers services from doctors and other healthcare providers, outpatient care, home healthcare, durable medical equipment, and preventive services such as screenings, shots, and yearly wellness visits.
• Part C (Medicare Advantage) This is a type of Medicare health plan offered by a private company but approved by Medicare. These plans provide Part A, Part B, and usually Part D.

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• Part D (Prescription Drug Coverage) This covers some or all of the cost of prescription drugs.

What Is Medicaid?

How Do Medicare and Medicaid Differ?

Both programs offer health insurance coverage, but they serve different people. Medicare generally provides coverage for people ages 65 and older, whereas Medicaid provides coverage for people with limited income and resources.

How Do I Know Which Plan I’m Eligible For?

Medicare Eligibility

Age-Based Coverage If you are 65 or older and you (or your current or former spouse) paid Medicare taxes for at least 10 years (or 40 quarters), you automatically qualify for premium-free Medicare Part A. If you or your spouse didn’t pay enough Medicare taxes, you can still enroll, but you will pay a premium for Part A.

Medicaid Eligibility

Age and Disability Coverage If you’re on Medicare, you may also qualify for Medicaid if your income and assets are low (meaning you have dual eligibility). This can be a good thing, because Medicare doesn’t cover all your health insurance costs.

Medicare Savings Programs

Where Do I Sign Up?

You can sign up for Medicare or Medicaid online, or you can be automatically enrolled in Medicare Part A (and Part B if tied to Social Security benefits). While you can enroll in Medicaid year-round, you’re only able to enroll in Medicare during specific enrollment periods.

Medicare Enrollment

If you’re already getting Social Security or disability benefits, you’ll automatically be enrolled in Medicare Part A and Part B once you’re eligible for Medicare.

If you aren’t already receiving Social Security benefits, you can sign up by completing an application for Part A or by contacting Social Security through SSA.gov. You can also call 800-772-1213 to speak with a representative. Once you submit your application, you can also check the status of it online. You can sign up for Part C and Part D through Medicare.gov.

If you were a railroad employee, you can sign up through the Railroad Retirement Board.

• Initial Enrollment Period This is the seven-month period when you’re first eligible for Medicare: three months before your 65th birthday, the month of your birthday, and three months after your birthday.
• General Enrollment Period This is between January 1 and March 31 each year, with coverage starting the month after you sign up.
• Special Enrollment Period This is a limited window in which you can sign up for Medicare penalty-free after your active employer health insurance ends.
• Medicare Open Enrollment Period Between October 15 and December 7, you can join or switch Medicare Advantage or Part D plans.

Medicaid Enrollment

If you’re already getting Supplemental Security Income and live in Washington, DC, or one of the 34 participating states, you’ll automatically be enrolled in Medicaid.

If you’re not automatically enrolled in Medicaid, you can sign up anytime through your state Medicaid office or HealthCare.gov.

Is It Possible to Switch From Medicaid to Medicare?

Yes, you can switch between the two programs, especially in certain circumstances. These include:

• You turned 65. If you’re currently on Medicaid, you’ll automatically switch to Medicare for your primary insurance once you turn 65, but you still may qualify for both programs. Medicaid eligibility then changes from income-only to both income and asset limits. If you lose Medicaid while on Medicare, you have three months to join or change to a Medicare Advantage Plan with drug coverage or add Medicare Part D to your coverage. You can switch coverage starting from when you received notification of the change or as soon as your coverage ends, whichever is later. People who lose Medicaid coverage can sign up for Medicare Parts A and B within six months without a late penalty.

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Could I Ever Lose My Benefits?

Yes. If you lie on your application or commit other fraudulent acts, you could lose coverage. Otherwise, there are a few main ways you could lose your Medicare or Medicaid benefits.

• You can’t pay your Medicare bills. If you fall 90 days behind on your Medicare Part B payments, you’ll receive a “delinquent bill” notice. At this point, you must pay the total amount due or risk losing your Medicare coverage.

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  If you miss payments for Medicare Parts C or D, your grace period will be at least two full calendar months. If you don’t pay within that time, you risk losing your benefits. If you’re behind on payments because of financial hardship, you may want to see if you are eligible for a Medicare Savings Program to help with your costs.

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• There’s a change in your health status. If you’re eligible for Medicare only because you have end-stage renal disease, you’ll lose your coverage 12 months after you stop dialysis or 36 months after you receive a kidney transplant. Medicare does offer a benefit to help you pay for immunosuppressive drugs beyond 36 months, however. For Medicaid, you may lose eligibility if your disability status improves.

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• You turned 18 and no longer qualify for services. Upon turning 18, young adults who were receiving Medicaid must requalify for disability benefits under stricter adult criteria. If you qualify for Supplemental Security Income, you’ll likely be able to receive Medicaid, too. Even if your Supplemental Security Income stops, you still may be able to keep your Medicaid coverage.

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• You’re moving (or you recently moved). If you move outside your Medicare Part C (Medicare Advantage) or Part D plan’s service area, you must switch plans before relocating or within two months afterward to maintain coverage. If you move and don’t join a new Medicare Advantage Plan during this Special Enrollment Period, you’ll be enrolled in original Medicare when you’re dropped from your old Medicare Advantage Plan. Moving out of the country? Know that Medicare does not provide coverage outside the United States. As for Medicaid, because eligibility rules vary by state, you’ll need to reapply and may face different coverage requirements when you move.

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• You experienced a change in income or household resources. If your income rises above your state’s Medicaid eligibility limit, if your savings and assets exceed a certain amount, or if there are changes to your household size, you may lose your Medicaid benefits. You must generally report these changes within the time your state requires; failing to do so can result in penalties.

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  Starting no later than January 1, 2027, states are required to implement a Medicaid community engagement requirement for adults ages 19 to 64 who receive Medicaid through a state expansion. The requirements are at least 80 hours of work per month, community service, a work program, or part-time school, with exceptions for certain people, including those who are pregnant or disabled. Not meeting these requirements may lead to a loss of coverage.

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