Medicaid vs. Medicare: Key Differences Explained

Medicare eligibility is defined federally and applies identically across all 50 states. You qualify if you are 65 or older and have worked (or your spouse has worked) at least 10 years paying Medicare taxes. People under 65 can qualify if they have received Social Security Disability Insurance (SSDI) for 24 months, have amyotrophic lateral sclerosis (ALS), or have end-stage renal disease requiring dialysis or a kidney transplant.

Medicaid eligibility is far more variable. In states that expanded Medicaid under the Affordable Care Act, most adults under 65 with household income at or below 138% of the Federal Poverty Level (FPL) qualify regardless of other factors. In non-expansion states, adults without children often do not qualify at all, no matter how low their income — per KFF analysis as of 2026, 10 states have still not adopted the ACA Medicaid expansion.

Beyond the expansion population, Medicaid also covers several distinct eligibility groups with different income and asset rules:

The phrase "low-income" understates how narrow Medicaid can be in some states. A single adult earning $15,000 per year in a non-expansion state may have no path to Medicaid coverage at all. That same person in an expansion state would qualify. This state-by-state variation is a defining feature of Medicaid eligibility that Medicare does not share.

Original Medicare has four distinct parts. Part A covers inpatient hospital care, skilled nursing facility care (short-term only), hospice, and some home health services. Part B covers outpatient care, physician services, preventive care, and durable medical equipment. Part C (Medicare Advantage) bundles Parts A and B through private insurers and usually includes Part D drug coverage. Part D covers prescription drugs through standalone private plans.

Medicare does not cover dental care under original Parts A or B. No routine vision. No hearing aids. Long-term nursing home care is the most consequential gap: Medicare covers skilled nursing facility care only for up to 100 days following a qualifying hospital stay of at least 3 days — and only while a patient is making measurable medical progress. Custodial care (help with bathing, dressing, eating) is not covered at all by Medicare.

This long-term care gap is why many people eventually spend down their assets to qualify for Medicaid, even after decades of Medicare enrollment. A private nursing home room costs a median of about $129,600 per year, per Genworth's most recent Cost of Care survey — Medicare was never designed to cover it.

Approximately 12 million people — often called "dual eligibles" or "dually eligible beneficiaries" — are enrolled in both Medicare and Medicaid at the same time. This is legal, common, and in most cases highly beneficial to the enrollee.

When a dual-eligible person receives a Medicare-covered service, Medicare pays first. Medicaid pays last — picking up deductibles, coinsurance, and copayments that Medicare leaves behind. Per medicare.gov, if a person qualifies for full-benefit Medicaid, the state will pay their Medicare Part B monthly premium. Depending on the level of Medicaid coverage, the state may also cover Part A premiums, deductibles, and all cost-sharing.

Dual eligibles also automatically qualify for Extra Help (also called the Low Income Subsidy) with Part D prescription drug costs — a subsidy that can be worth thousands of dollars per year in reduced drug costs.

A hypothetical example: Maria is 68 years old, on Medicare, and has a monthly income of $1,100 — below 100% FPL. She qualifies for both Medicare and full-benefit Medicaid. Medicare covers her hospitalizations and doctor visits; Medicaid pays her Part B premium ($202.90/month in 2026), eliminates her Medicare deductibles, and covers nursing home care if she ever needs it.

Dual-eligible individuals have special enrollment options not available to other Medicare beneficiaries. Special Needs Plans (D-SNPs) designed for this population are available in most states. In certain states, Medicare-Medicaid Plans coordinate both programs under a single managed care contract. PACE (Program of All-Inclusive Care for the Elderly) is available in some states for those who meet nursing home level of care but want to remain in the community.

Medicare Savings Programs (MSPs) are a category of Medicaid benefit specifically designed to help low-income Medicare enrollees pay Medicare's premiums, deductibles, and cost-sharing. Many people who qualify have never heard of them. Per KFF's analysis of 2026 Medicaid eligibility levels, there are three primary MSP categories:

Asset limits for MSPs vary considerably by state. Most states use $9,950 for an individual and $14,910 for a couple. Several states — including Arizona, Alabama, Louisiana, and Mississippi — have eliminated asset tests for MSP eligibility entirely. California reinstated its asset limit in recent years, set at $130,000 for an individual (per KFF 2026 data). DC has expanded QMB eligibility to 300% FPL, the most generous threshold in the country.

Applying for a Medicare Savings Program is done through your state Medicaid agency, not through Medicare itself. Many people who qualify don't apply because they don't realize the programs exist or assume they won't qualify based on partial information.

Medicare was designed as acute care insurance. It covers hospital stays, surgeries, and recovery. It was not designed to cover the years of custodial support that older adults with dementia, Parkinson's, or other progressive conditions often require.

Medicaid is the primary payer for long-term care in the United States — covering over 6 in 10 nursing home residents, per KFF/CMS data. To qualify for Medicaid long-term care coverage, individuals generally must meet income and asset limits that vary by state; most states require assets to be below $2,000 for a single individual (excluding primary residence in many states, one vehicle, and certain personal property). This is why "spending down" — depleting assets to meet Medicaid eligibility — is a real and documented planning strategy, though it requires careful navigation of Medicaid's look-back period rules.

Medicaid also funds Home and Community-Based Services (HCBS) waivers under Section 1915(c) of the Social Security Act, allowing states to cover personal care, adult day health, and other community supports for people who would otherwise require institutional care. These waivers have waiting lists in many states, sometimes thousands of people long. A common misconception: people assume Medicare will cover long-term nursing home care if they need it. It will not — except for brief post-hospital skilled nursing stays.

Medicaid has no premiums for most enrollees. Copayments are nominal — federal law limits Medicaid cost-sharing to small amounts for most services, and states cannot charge cost-sharing for emergency services, pregnancy-related care, or services for children.

Medicare has meaningful cost-sharing. The Part B standard premium in 2026 is $202.90/month for most enrollees, though higher-income beneficiaries pay more through Income-Related Monthly Adjustment Amounts (IRMAA). Part A has a per-benefit-period deductible ($1,736 in 2026) and daily coinsurance for longer hospital stays. Part D drug plans have their own premiums and cost-sharing structures.

The practical upshot: a low-income person with both Medicare and Medicaid may pay close to nothing out of pocket for covered health care, because Medicaid covers what Medicare doesn't. A Medicare-only enrollee with modest retirement income can face thousands of dollars per year in premiums and cost-sharing.

A policy change worth noting: the 2025 federal budget reconciliation law ("One Big Beautiful Bill Act") created a statutory Medicaid work requirement — the first in the program's history — requiring certain adults to complete at least 80 hours per month of work or approved activities to qualify for Medicaid, with implementation required no later than January 1, 2027 (earlier for states that choose to implement sooner). CMS then issued an interim final rule to implement the statute. These requirements explicitly do not apply to people who also have Medicare — dual eligibles are exempt. This is enacted federal law, unlike the earlier state-by-state 1115 waiver attempts (such as Arkansas's 2018 implementation, which was struck down by the D.C. Circuit Court of Appeals) — states cannot opt out of it.

Medicare itself has no work or activity requirements for enrollment — only the age or disability criteria described above.

Applying for Medicare and applying for Medicaid are entirely separate processes.

Most people are automatically enrolled in Medicare Part A and Part B when they turn 65 if they are already receiving Social Security benefits. If not, you apply through the Social Security Administration — online at ssa.gov, by phone, or in person. The Initial Enrollment Period starts three months before your 65th birthday month.

To apply for Medicaid, you contact your state's Medicaid agency directly. In expansion states, you can also apply through healthcare.gov. Eligibility is determined by the state, documentation requirements vary, and processing timelines differ. The federal standard for non-disability Medicaid applications is 45 days (90 days for disability-based Medicaid), per 42 CFR 435.912. If you are already on Medicare and think you might qualify for Medicaid or a Medicare Savings Program, contact your state Medicaid agency — the income and asset thresholds for MSPs are higher than many people expect.

The answer depends on your situation:

Some people need both. Having Medicare does not disqualify you from Medicaid. The two programs are designed to work together, and for roughly 12 million Americans, they do — providing coverage that neither program alone would offer.