What is the difference between Medicare and Medicaid?

1 min readLast updated December 5, 2023by Rachel Carey

Learn all about the differences and similarities between these two branches of modern healthcare in the US.


  • The main difference between Medicare and Medicaid is the age of eligibility. 

  • Both Medicare and Medicaid are government-funded healthcare programs. 

  • Medicaid is the US’s most popular form of healthcare. 

  • Medicare has different tiers for different services. 

What is Medicare and Medicaid? 

Medicare and Medicaid are two separate forms of government-sponsored healthcare services in the US.  

They exist to provide the most accessible and affordable healthcare services possible to American citizens. Since being established in 1965, both programs have become indispensable to nationwide healthcare and represent two of the most prominent medical management services in the US.  

Due to their similar-sounding names, Medicaid vs Medicare is frequently misunderstood. However, both of these programs are unique.  

To begin with, Medicare offers a tiered system of services arranged in “Plans” from A-D, offering services exclusively to citizens over the age of 65. In contrast, Medicaid is a joint federal and state program that assists low-income citizens of all ages with accessing essential healthcare services.  

Medicaid vs Medicare: what’s the difference? 

There are many differences between Medicaid and Medicare. Some of the most notable ones include: 


  • Only for senior or disabled citizens   

  • Offers a tiered plan system from A-D  

  • Social Security benefit recipients are automatically enrolled  


  • Accessible to people of all ages  

  • Designed for low-income families  

  • Most popular form of healthcare in the US 

Understanding the differences between Medicare and Medicaid is important for any US citizen. For the sake of further clarification, let’s take an even closer look at each of these healthcare programs, focusing on their key features and benefits.  

What is Medicare? 

Medicare is a program designed specifically for senior citizens or younger citizens with certain disabilities, such as ALS.  

People pay for Medicare services with monthly premiums, deductibles, and coinsurance. Rates are standardized, so beneficiaries pay the same, regardless of what state they live in.  

What is covered by Medicare? Medicare’s four-tier plan is structured as follows: 

  • Part A: Hospitalization coverage - This covers any emergency or regular hospital visits. 

  • Part B: Medical insurance - Any medical services, equipment, visits, or lab work.  

  • Part C: Advantage plans - Some private healthcare companies work with Medicare to cover additional health-related services such as dental, physio, and hearing.  

  • Part D: Prescription drug coverage - Covers the cost of prescription drugs.  

What is Medicaid? 

Medicaid was created specifically to provide healthcare support for low-income families.  When Medicaid fully came into effect between 2013 and 2017 due to the Affordable Care Act (ACA), the number of American citizens who gained access to affordable healthcare increased by 17 million – an initiative that Obamacare largely influenced.  

How do I qualify for Medicaid? To qualify for Medicaid, you need to be an American citizen who earns under $14,580 per year (as of January 2023) – or your income is 138% below FPL (Federal Poverty Line). However, the number changes and adapts to inflation rates. Some key characteristics of Medicaid include: 

  • Provides essential services to low-income citizens – Without Medicaid, most Americans would not be able to adequately finance their healthcare needs. 

  • Covers a wide range of services – Medicaid can cover inpatient and outpatient hospital services, nursing facility services, home health services, nursing, midwifery, physician services, transportation to medical care, and more.  

  • Medicaid costs and benefits vary from state to state – Costs are calculated based on an individual’s income in relation to the poverty line, and access to benefits varies depending on the state legislature’s healthcare laws.  

For many American families, Medicaid is a lifeline of support. The integration of these services and the level of accessibility they provide have significantly improved the national healthcare system.  

Can I apply for both Medicaid and Medicare at the same time? 

Yes, you can apply for both Medicaid and Medicare simultaneously if you believe you are eligible for both programs. The question of who is eligible for both Medicare and Medicaid is easy to answer if you know the criteria of each program as outlined above.  

Are there specific healthcare providers that accept Medicaid or Medicare? 

Many healthcare providers accept Medicaid and Medicare, but patients should confirm with providers whether they participate in these programs before seeking care. 

Are there costs associated with Medicaid and Medicare? 

Medicaid costs are minimal for eligible individuals, with some states charging small premiums or copayments.  

Medicare has premiums, deductibles, and copayments depending on the specific coverage and income. 

Who funds Medicaid and Medicare? 

There’s no difference between Medicare and Medicaid when it comes to the source of their funding. The federal government funds both of these programs. However, Medicaid is funded by the state and the federal government.  

Can I change my Medicaid or Medicare coverage options? 

Both Medicaid and Medicare have annual enrollment periods during which you can make changes to your coverage options. However, there are specific rules and deadlines that you need to adhere to in order to meet the requirements. 

Are there any recent changes or updates to Medicaid and Medicare programs? 

It is very important to stay informed about changes in Medicaid and Medicare policies and programs, as they can be subject to legislative and regulatory updates that may affect your coverage and benefits. Factors such as inflation, new drugs becoming available, changes in drug pricing, and research developments can all affect these programs.  

Need more information? 

Understanding how these national healthcare programs work and how to navigate eligibility, costs, and benefits is essential for any working American citizen.  

If you want to learn more about Medicaid vs Medicare while obtaining expert financial advice, get matched with a professional financial advisor. Unbiased will help you to find the right SEC-regulated financial advisor for your needs.

Senior Content Writer

Rachel Carey

Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.