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 customer officer at the National Council on Aging.

• Part A (hospital insurance): Covers inpatient hospital care, skilled nursing facility care, hospice care, and home healthcare.
• Part B (medical insurance): Covers doctor’s visits, outpatient care, home healthcare, durable medical equipment, and preventive services such as screenings, shots, and yearly wellness visits.
• Part C (Medicare Advantage): 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.

  [3]

• Part D (prescription drug coverage): Covers some or all of the cost of prescription drugs.

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

Since Medicare is run by the federal government, coverage is the same no matter what state they live in; since Medicaid is run by the federal and state governments, the eligibility requirements can vary from state to state. Medicaid also tends to cover more services than Medicare.

Medicare Eligibility

Age-Based Coverage If you are 65 or older and if you (or your spouse) paid Medicare taxes for at least 10 years (or 40 quarters), you automatically qualify for premium-free Medicare Part A. If you or a loved one didn’t pay enough Medicare taxes, you can still enroll, but 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). That’s because Medicare doesn’t cover all your health insurance costs, so you can qualify for Medicaid on the basis of factors that include your household income and age.

Medicare Savings Programs (MSPs)

You can sign up for both Medicare and Medicaid online, or be automatically enrolled in Medicare Part A and B. 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 getting Social Security benefits or aren’t eligible for retirement, you can sign up by completing an application for Part A or by contacting Social Security though 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.

You can only sign up for Medicare at certain times, though, including:

• Initial Enrollment Period (IEP) The 7-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 (GEP) Between January 1 and March 31 each year
• Special Enrollment Period (SEP) A period occurs if you didn’t sign up for Medicare when you first became eligible because you already had health insurance coverage through your or your spouses’s employer.

  [16]

Medicaid Enrollment

If you’re already getting SSI 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.

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. 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.

  [17]

• You turned 18 and no longer qualify for disabilities. Upon turning 18, young adults who were receiving Medicaid must requalify for disability benefits under stricter adult criteria. If you qualify for SSI, you’ll likely be able to receive Medicaid, too.

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. If you receive a termination notice, you have a 30-day grace period to pay what you owe and maintain your Part B coverage.

  [18]

   If you miss payments for Medicare Parts C or D, your grace period will be at least 60 days. If you don’t, you risk losing your benefits. If you’re behind on payments because of financial hardship, you may be eligible for a special payment plan.
• There’s a change in your health status. If you’re eligible for Medicare only because you have ESRD, 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.

  [19]

• 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 or immediately after relocating 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.

  [21]

• 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 report these changes within 10 days; failing to do so can result in penalties.

  [22]

• Medicare is a federal program primarily for those age 65 and older, while Medicaid is a federal and state program for those with limited income and resources.
• You can qualify for both Medicare and Medicaid if you meet certain eligibility requirements for each program.
• Medicare has certain enrollment windows, while Medicaid enrollment is open year-round.
• Changes to your health status, income, or state residence can affect your benefits, so report any of these changes right away to avoid a penalty.