Medicare vs. Medicaid: What Is the Difference?


Medicare and Medicaid are not identical twins, even though they were both formed at the same time. Many individuals continue to mix up these two government-sponsored health care programmes even though they have been around for almost 60 years.

Many individuals are unaware that around 20% of Medicare recipients qualify for both Medicaid and Medicare. These persons receive additional advantages and lower out-of-pocket expenses and are referred to as “dual eligibles” in the industry.

Difference Between Medicare and Medicaid

President Lyndon Johnson enacted the laws establishing Medicare and Medicaid on July 30, 1965, as part of his Great Society initiatives to combat issues of hunger, poverty, and inequality.

Both offer health care coverage

Both Medicare and Medicaid offer health care coverage, but they do so in different ways:

  • Regardless of their income, those with impairments, amyotrophic lateral sclerosis, or end-stage renal illness younger than 65 can receive health care coverage under the federal programme known as Medicare.
  • Medicaid is a joint state-federal programme that offers low-income people access to healthcare regardless of their age.

Some persons may be dual eligible  , or be able to receive benefits from both Medicaid and Medicare. The two programmes offer health insurance and cheaper expenses for those who sign up for them. Even though both Medicare and Medicaid are government-run health insurance programmes, there are distinctions in the services they provide and the prices they charge.

Medicare Defined

Medicare is administered by the Centers for Medicare & Medicaid Services, a federal agency, and provides essentially the same coverage and costs across the country.

Medicare recipients pay monthly payments for coverage as well as hospital and other service deductibles as a fraction of their medical expenses.

Medicare consists of two sections. Hospice care, hospital care, and rehabilitative care are covered by Part A, while other services like doctor visits, outpatient therapy, mental health care, and durable medical equipment are covered by Part B. (such as walkers). If you or your spouse worked and paid Medicare taxes for at least ten years and are age 65 or older, according to CMS, you are qualified for Part A which is premium-free.

You can also get Part A at age 65 without having to pay premiums if:

  • You receive retirement benefits or are eligible to receive benefits from Social Security or the Railroad Retirement Board.
  • You or your spouse had Medicare-covered government employment.
  • If you’re under age 65, you can get Part A without having to pay premiums if:
  • You have been entitled to Social Security or Railroad Retirement Board disability benefits for 24 months.
  • You are a kidney dialysis or kidney transplant patient.

According to CMS, the majority of Medicare recipients are exempt from paying a premium for Part A, but everyone is required to pay a premium for Part B. Your Social Security, railroad retirement, or Civil Service retirement check will be deducted for this each month; if you receive none of these benefits, you will be billed for your Part B premium every three months.

Medicare Part D provides coverage for prescription medications. For a monthly fee, anyone with Medicare can get prescription drug coverage regardless of their income, health, or use of prescription medications.

Although some commercial insurance providers provide Medicare coverage, the Original Medicare programme is administered by the federal government. Medicare Advantage is the name of these programmes. These include Part A and Part B coverage, while prescription drug coverage may or may not be included.

Medicaid Defined

The government assistance programme Medicaid is run jointly by the federal and state governments. As a result, each state has different requirements for coverage and price.

It helps low-income individuals, families with young children, expectant mothers, senior citizens, and people with impairments of all ages. Although each state is free to decide who is considered to be in poverty and who is not, income levels are often based on the federal poverty threshold.

According to CMS, patients typically pay a minimal co-payment or none at all for covered medical expenses. According to CMS, some states provide coverage for all low-income adults who fall below a specific income threshold. Since the Affordable Care Act’s passage, states have been permitted to extend their Medicaid programmes to include all individuals with family incomes below a specific threshold. While some governments have implemented this, others have not.

Whether your state has extended its Medicaid programme will affect your eligibility in part. If your household income is less than 133 per cent of the federal poverty threshold, you may be eligible for Medicaid in states that have extended Medicaid coverage, according to CMS. However, some states have a different upper-income cap.


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