Medicare vs. Medicaid: What’s the Difference?

If you’ve ever heard “Medicare” and “Medicaid” in the same sentence, you’re not alone in feeling confused. They’re both government health programs, but they were created for different reasons, serve different groups of people, and work in very different ways. Let’s break it down.

What Is Medicare?

Medicare is a federal health insurance program run by the U.S. government. It provides health insurance for disabled people and people over 65.

Think of it this way: once you turn 65, Medicare is there for you no matter how much money you have. Most people earn their Medicare coverage by working and paying into the program through taxes during their working years. Some people under 65 can also qualify if they have certain disabilities.

What Is Medicaid?

Medicaid is a joint program run by both the federal government and each individual state. Medicaid doesn’t care how old you are — it’s based on financial need.

This means Medicaid can cover children, pregnant women, adults with disabilities, and elderly people — as long as they meet their state’s income and asset guidelines. Because each state runs its own version of Medicaid, the rules and benefits can look a little different depending on where you live. MassHealth is the Medicaid program in Massachusetts.

How Do They Pay for Care?

Medicare and Medicaid handle costs in different ways. Medicare usually has premiums (monthly fees), deductibles (amounts you pay before insurance kicks in), and copays (your share of a doctor’s visit or hospital stay). Most people pay little or nothing for Part A, but do pay a monthly premium for Part B, which covers doctor visits and outpatient care.

Medicaid, on the other hand, is designed to be very affordable for the people it serves. Many Medicaid beneficiaries pay little to no cost for their care, because the whole point of the program is to help people who can’t afford medical bills on their own.

What Do They Actually Cover?

Both programs cover important medical services like hospital stays, doctor visits, and lab tests. But they differ in some big ways when it comes to long-term care — and that’s especially important for older adults.

Medicare covers short-term stays in a skilled nursing facility for rehabilitation (like after a surgery or serious illness), but it does not pay for long-term nursing home care. Medicaid, however, does cover long-term nursing home care for people who qualify. This is one of the biggest and most important differences between the two programs — especially for seniors and their families planning for the future.

Side-by-Side Comparison

Feature	Medicare	Medicaid
Who qualifies?	People 65+ or disabled	People with low income (any age)
Who runs it?	Federal government	Federal & state governments
Based on…	Age (and work history)	Income and financial need, sometimes age depending on the program
Monthly costs?	Yes — premiums & copays	Little to none for most, some programs do require a deductible if  over income
Covers long-term nursing home care?	No (only short-term)	Yes, if you qualify
Rules the same everywhere?	Yes — set by federal law	No — rules change by state
Can someone have both?	Yes — some people qualify for both programs at the same time

Why Does This Matter for Seniors?

For older adults and their families, understanding the difference between Medicare and Medicaid can make a huge difference — especially when it comes to planning for long-term care. Medicare might cover your hospital stay, but if you ever need to live in a nursing home for a longer period, Medicaid is the program that can help with those costs. Planning ahead and knowing which program applies to your situation is one of the smartest things a family can do.

Can Someone Have Both?

Absolutely. Some people — often older adults with low incomes — qualify for both Medicare and Medicaid at the same time. When that happens, the two programs work together. Medicare usually pays first, and Medicaid may help over the costs that Medicare doesn’t — like copays or long-term care. People who have both are sometimes called “dual eligible” beneficiaries.

Questions About Your Coverage?

Navigating Medicare, Medicaid, and long-term care planning can feel overwhelming. Our elder law attorneys are here to help you understand your options and protect what matters most.  Contact us.

Founded by a nurse attorney and with offices in Acton, Andover, and Sudbury, Massachusetts, Generations Law Group helps families navigate the complex areas of estate planning and elder law to inform and protect loved ones of every generation.

 

Disclaimer: This blog is for general informational purposes only and does not constitute legal or financial advice. Medicare and Medicaid rules can be complex and vary by state. Please consult with a qualified elder law attorney for guidance specific to your situation.

 

Founded by a nurse attorney and with offices in Acton, Andover, and Sudbury, Massachusetts, Generations Law Group helps families navigate the complex areas of estate planning and elder law to inform and protect loved ones of every generation.

 

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