Medicare vs. Medicaid: Key Differences and What Is Covered

Medicare and Medicaid Health Programs Grandma with Child saving money
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In 1965, an amendment to the Social Security Act established Medicare and Medicaid, two government-run health programs. Their names that sound the same may lead some people to be confused about what each program covers. Adding to the questions people have about these programs is that in some cases, people may be able to sign up for both. 

Both plans offer a few coverage options. This can make learning about them even more complex, but knowing how these programs work and differ can save you money on your health care costs.  

Learn more in our review of Medicare and Medicaid. Find out who qualifies, what's covered, and some of the key ways they differ.

If you qualify for Medicare and are ready to look at plans, eHealth Medicare, an independent insurance broker and partner of The Balance, has licensed insurance agents at 833-970-1258 TTY 711 who can help connect you with Medicare Advantage, supplement plans, and Prescription Drug Part D plans.

Key Takeaways

  • Medicare is mostly based on age, while Medicaid is a welfare program based on income. Its purpose is to help people with low incomes without regard to age.
  • Medicare Parts A and B do not include dental care, but Medicaid may cover some dental care and treatment for adults in some states.
  • State Health Insurance Programs (SHIP) provide free help to teach people about programs that can help save money.
  • People who have Medicare may also be able to get Medicaid and use it to help pay the monthly premiums and other costs of their program.

Key Differences Between Medicare and Medicaid

A key difference between Medicare and Medicaid is that one is mainly based on age, and the other is a welfare program for people of all ages with limited financial means.

Medicare assists people 65 or older. In some cases, people under 65 with certain health concerns may be able to sign up. This only applies to the person who qualifies, but not the person's entire family. Medicaid is jointly run by the state and federal governments. It is for people whose eligibility is based on income rather than age or disability. It helps people and families who meet income limits get health care.

You can apply for Medicaid at any time. You do not have to wait for an open enrollment period. In most cases, people who qualify for it may be exempt from the individual penalty. There's more on that below. When you apply for Medicare outside the time to enroll, you may have a penalty.

Differences in Dental and Vision Care

Medicare parts A and B do not include dental care like cleanings, fillings, getting teeth pulled, dentures, dental plates, or other dental items. Medicaid may cover dental care for adults in some states as well as treatment in others. This varies by state but can be a big plus over Medicare alone.

In certain cases, Medicare Part A may cover dental care if received in a hospital. Most times this would not include your standard dental care.

Medicaid, on the other hand, only covers dental care for children.

Eye exams or glasses may be covered by Medicaid in most states. Medicare may include a basic vision test as part of Part B care in the first preventive visit or the yearly wellness visit.

Sources to Help to Learn About Medicare and Medicaid Options

Trying to make sense of all the Medicare and Medicaid details can be a challenge. There are many programs offered, and it can be easy to get lost in the details. The good news is there are many places to get free help learning which program to sign up for. There are also other programs that you may be able to sign up for if you qualify.

State Health Insurance Assistance Programs (SHIP)

State Health Insurance Assistance Programs (SHIP) provide free, in-depth, neutral advice to help you learn about what's covered and program options which can help save you money. You can find out if there is a local SHIP office near you. You can also check out the SHIP website to get updates.

Understanding Medicaid Coverage

Medicaid may provide free or low-cost health care to people and families who meet income guidelines, people who are pregnant, seniors, and people with disabilities. More than 80 million people were covered by Medicaid/CHIP in the U.S. as of 2021.

U.S. Medicaid rules specify certain mandatory benefits. Beyond that, each state may choose to offer extra benefits along with the basics. Because the plans are managed by each state, the state may decide the scope of the optional benefits as well as eligibility rules.

How to Get Medicaid

Medicaid differs from Medicare because it is based on finances and not age. These factors are looked at when seeing who qualifies for it:

  • Income.
  • Household size.
  • Disability.
  • Family status.

People who may be eligible for Medicaid may include: people who are pregnant, teenagers living alone, parents of sick children, people with high medical costs, blind or disabled people, or people and families with low incomes.

Each state decides on who qualifies financially for the program. Some states that have expanded Medicaid include higher income levels in their eligibility criteria than states who have not expanded it. 

You can find out if your state is growing Medicaid and see if you qualify for it based on income or if you can get any other savings on health care.

Examples of Basic Medicaid Benefits

Below are some basic services that may be included in Medicaid.

  • Hospitalization and clinic treatment.
  • Lab and x-ray services.
  • Doctor and nursing services.
  • Medical and surgical dental services.
  • Family planning and midwife services.
  • Nursing facility services for people aged 21 or older.
  • Home healthcare for people eligible for nursing facility services.
  • Pediatric and family providers.
  • Screening, diagnosis, and treatment services for persons under age 21.

Can You Have Medicare and Medicaid?

People who have Medicare may also get Medicaid to help pay the monthly premiums and out-of-pocket costs like deductibles of their program. If you can get both, you are deemed "dual eligible."

Medigap is an add-on health plan for Medicare that may help cover co-pays and deductibles if you can't get Medicaid.

Understanding Medicare Options

Medicare provides coverage in a few parts, with different plan options. You can have original Medicare or an Advantage Plan.

You can get Medicare from a public or private plan. Getting a plan through private insurance such as in the case of the Advantage Plan may allow you greater options in your care.

Medicare Part A covers hospital services and is free most of the time, but you may pay for it as well. For instance, if you did not work long enough to earn it, you can still get it, but you will need to pay for it.

Medicare Part B covers medical services. There is a cost to the Part B plan.

Medicare Parts A and B do not cover dental care, but you may be able to get covered by a supplemental health plan

Medicare Part C could confuse some people because it covers Parts A and B and may even include drug costs. Part C is known as the Advantage Plan. You may be able to get one of these plans that also offers vision and dental care. Be sure and check all your options when choosing one of these plans.

Medicare Part D covers prescription drugs.

If you want to access an entire list of what Medicare may cover, you can find one on the Medicare website.

How to Get Medicare: Eligibility for Parts A, B, and C

Medicare Part A: In most cases, you must be 65 years or older. You may be able to get Medicare if you are under 65 with certain conditions, end-stage renal disease, or Lou Gehrig's disease. If you are disabled and get Social Security payments for more than 24 months in a row, you may be enrolled in Medicare Part A automatically the 25th month of getting benefits.

Medicare Part B: If you qualify for Part A, then you will have met the same rules to sign up for Part B in most cases.

Medicare Part B is optional, so make sure and sign up for it in time or you may pay a penalty for signing up after the deadline.

Medicare Part C (Medicare Advantage Plans): In order to be eligible for Part C, you must meet the rules of A and B. You can switch from a Plan A and B to a Plan C during an enrollment period.

Medicare Savings Programs and the Extra Help Program

There are many kinds of Medicare savings programs that may help if you can't get Medicaid. It is worth looking into these to see if you qualify. You may also want to look into the Medicare Part D low income subsidy for prescription drugs: The Medicare Extra Help program

Get Medicaid Facts

Kaiser Family Foundation's Medicaid Pocket Primer offers detailed help and a strong look at the vital nature of the Medicaid program in the U.S. and reports on data about the people who use it.