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Quick Answer
Medicare is a federal health insurance program primarily for people 65 and older (and certain disabled individuals), regardless of income. Medicaid is a joint federal-state program for people with low income and limited resources. Some people qualify for both programs simultaneously - these individuals are called "dual eligibles" and receive comprehensive coverage from both.
Coverage Comparison by Plan Type
| Plan Type | Coverage | Notes |
|---|---|---|
| Medicare | Federal program for age 65+, disabled, or ESRD patients | Eligibility not based on income; funded by payroll taxes and premiums |
| Medicaid | Joint federal-state program for low-income individuals and families | Eligibility based on income and resources; varies by state |
| Dual Eligible (Both) | Qualifies for both Medicare and Medicaid simultaneously | Medicaid helps pay Medicare premiums, deductibles, and copays |
| Medicare Savings Programs | State programs that help pay Medicare costs for low-income beneficiaries | 4 types: QMB, SLMB, QI, QDWI - each with different income limits |
Understanding Your Coverage Options
Medicare: Who Qualifies and What it Covers
Medicare is a federal health insurance program administered by the Centers for Medicare & Medicaid Services (CMS). It is primarily for people 65 and older, but also covers younger individuals with certain disabilities or End-Stage Renal Disease (ESRD).
Medicare eligibility is not based on income or assets. You qualify based on age, disability status, or medical condition - not how much money you have.
What It Covers
- Age 65 or older (U.S. citizen or legal resident for 5+ years)
- Under 65 with a qualifying disability (after 24 months of SSDI)
- Any age with End-Stage Renal Disease (ESRD) or ALS
- Part A: Hospital stays, skilled nursing, hospice, home health
- Part B: Doctor visits, outpatient care, preventive services, durable medical equipment
- Part D: Prescription drug coverage (via standalone plan or Medicare Advantage)
What It Doesn't Cover
- Long-term custodial care (nursing home stays beyond skilled care)
- Most dental, vision, and hearing (unless via Medicare Advantage)
- Coverage outside the U.S. (with limited exceptions)
Medicare Costs in 2026
Part B standard premium: $202.90/month. Part A deductible: $1,736/benefit period. Part B deductible: $257/year. Most people don't pay a Part A premium if they or their spouse worked 40+ quarters.
Medicaid: Who Qualifies and What it Covers
Medicaid is a joint federal and state program that provides health coverage to low-income individuals and families. Unlike Medicare, Medicaid eligibility is based primarily on income and resources, and the rules vary by state.
In states that expanded Medicaid under the Affordable Care Act (ACA), adults with income up to 138% of the Federal Poverty Level (FPL) generally qualify. In 2026, that is approximately $20,782/year for an individual.
What It Covers
- Low-income adults, children, pregnant women, elderly, and disabled individuals
- Income generally at or below 138% FPL in expansion states
- Hospital and doctor services, often with $0 or very low copays
- Long-term care and nursing home coverage (a key difference from Medicare)
- Dental, vision, and hearing services (varies by state)
- Mental health and substance use disorder services
What It Doesn't Cover
- Not available to most non-citizens (5-year residency rule for most immigrants)
- Coverage and benefits vary significantly by state
- Some states have not expanded Medicaid - income limits may be much lower
Key Differences: Medicare vs. Medicaid
The two programs are often confused because they have similar names and both provide health coverage. However, they serve different populations and work very differently.
What It Covers
- Medicare: Federal program / Medicaid: Joint federal-state program
- Medicare: Based on age or disability / Medicaid: Based on income and resources
- Medicare: No income limits / Medicaid: Income and asset limits apply
- Medicare: Premiums and cost-sharing required / Medicaid: Little to no cost-sharing
- Medicare: Does not cover long-term custodial care / Medicaid: Covers nursing home care
- Medicare: Same nationwide / Medicaid: Benefits vary by state
What It Doesn't Cover
- Neither program covers all healthcare costs without supplemental coverage
Dual Eligibility: Qualifying for Both
Some people qualify for both Medicare and Medicaid at the same time. These individuals are called "dual eligibles" or "dual-eligible beneficiaries." In 2026, approximately 12 million Americans are dual eligible.
For dual eligibles, Medicaid typically acts as secondary insurance, helping to pay Medicare premiums, deductibles, and cost-sharing. This can result in very low or even $0 out-of-pocket costs.
What It Covers
- Medicaid pays the Part B premium ($202.90/month in 2026) for qualifying dual eligibles
- Medicaid covers Medicare deductibles and copays
- Dual eligibles automatically qualify for Medicare Extra Help (LIS) for Part D
- Special Needs Plans (SNPs) are designed specifically for dual-eligible beneficiaries
What It Doesn't Cover
- Not all dual eligibles receive the same level of assistance - it depends on income level
- Must still meet Medicare eligibility requirements (age 65+ or disability)
Medicare Savings Programs
If you have Medicare and a limited income, you may qualify for a Medicare Savings Program (MSP) even if you don't qualify for full Medicaid. MSPs help pay Part A and Part B premiums, deductibles, and copays. There are 4 types: QMB, SLMB, QI, and QDWI.
How to Apply for Medicaid and Medicare Savings Programs
Medicare enrollment is handled through the Social Security Administration (SSA). Most people are automatically enrolled at 65 if they receive Social Security benefits. Others must apply during their Initial Enrollment Period.
Medicaid applications are handled by your state's Medicaid agency. You can apply online through your state's Medicaid portal, through Healthcare.gov, or in person at your local Medicaid office.
What It Covers
- Apply for Medicare at ssa.gov or call 1-800-772-1213
- Apply for Medicaid through your state's Medicaid agency or Healthcare.gov
- Apply for Medicare Savings Programs through your state Medicaid office
- Apply for Extra Help (LIS) at ssa.gov or call Social Security
- Enrollment in both programs can happen simultaneously
Medicare vs. Medicaid: Cost and Coverage Comparison
| Feature | Medicare | Medicaid | Dual Eligible |
|---|---|---|---|
| Eligibility basis | Age 65+ or disability | Low income/resources | Meets both criteria |
| Monthly premium | $202.90 (Part B, 2026) | Usually $0 | Medicaid may pay Part B premium |
| Deductibles | $1,736 (Part A) / $257 (Part B) | Usually $0 | Medicaid covers most |
| Copays | 20% coinsurance (Part B) | $0–$4 typically | Very low or $0 |
| Long-term care | Limited (skilled only) | Yes (nursing home) | Medicaid covers |
| Dental/vision | Limited (MA plans) | Yes (varies by state) | Medicaid covers |
✦ Important Exceptions & Special Situations
Medicare Savings Programs (MSPs)
Even if you don't qualify for full Medicaid, you may qualify for a Medicare Savings Program if you have Medicare and limited income. MSPs help pay Part B premiums and sometimes deductibles and copays. There are 4 types: QMB (Qualified Medicare Beneficiary), SLMB (Specified Low-Income Medicare Beneficiary), QI (Qualifying Individual), and QDWI.
MSPs can save you $2,000+ per year on Medicare costs.
Medicaid Spend-Down
Some states allow people with income above the Medicaid limit to qualify by "spending down" their income on medical expenses. Once your medical expenses reduce your income to the Medicaid threshold, you become eligible.
Dual Eligible Special Needs Plans (D-SNPs)
If you qualify for both Medicare and Medicaid, you may be eligible for a Dual Eligible Special Needs Plan (D-SNP), a type of Medicare Advantage plan designed specifically for dual eligibles. These plans coordinate both programs and often include extra benefits.
Medicaid and Immigration Status
Most lawful permanent residents (green card holders) must wait 5 years before qualifying for Medicaid. Undocumented immigrants generally do not qualify for Medicaid except for emergency services. Some states provide state-funded coverage regardless of immigration status.
✦ Recent Policy Updates
H.R. 1 (2025): Medicaid Work Requirements Proposed
ProposedThe House passed H.R. 1 in 2025, which included provisions for Medicaid work requirements for able-bodied adults. The Senate version is still being debated as of 2026.
ACA Medicaid Expansion Continues in 2026
Passed40 states plus D.C. have expanded Medicaid under the ACA. Adults with income up to 138% FPL (~$20,782/year individual in 2026) qualify in expansion states.
Medicare Savings Program Auto-Enrollment Expansion
PassedCMS expanded auto-enrollment in Medicare Savings Programs for low-income Medicare beneficiaries who are identified through data matching with Medicaid agencies.
How to Maximize Benefits When You Have Both
If you qualify for both Medicare and Medicaid, coordinating the two programs correctly can dramatically reduce your healthcare costs.
Dual Eligible Action Checklist
- Apply for Medicare during your Initial Enrollment Period (3 months before turning 65)
- Apply for Medicaid through your state's Medicaid agency
- Apply for Medicare Savings Programs even if you don't qualify for full Medicaid
- Apply for Medicare Extra Help (LIS) to reduce Part D drug costs
- Consider a Dual Eligible Special Needs Plan (D-SNP) for coordinated care
- Review your Medicaid benefits annually - income limits and benefits change
- Contact your State Health Insurance Assistance Program (SHIP) for free counseling
✦ Frequently Asked Questions
David Haass
AuthorDavid Haass is a licensed insurance agent and Medicare specialist at MedicareFAQ.com.
Ashlee Zareczny
ReviewerAshlee Zareczny is the Compliance & Editorial Manager at MedicareFAQ.