The Core Difference in One Sentence
Medicare is a federal health insurance program based on age or disability status. Medicaid is a joint federal-state assistance program based on low income. You can qualify for one, both, or neither depending on your age, disability status, and income.
Side-by-Side Comparison
| Factor | Medicare | Medicaid |
|---|---|---|
| Primary purpose | Health insurance for elderly/disabled | Health coverage for low-income individuals |
| Who qualifies | Age 65+, or under 65 with SSDI/ALS/ESRD | Low-income individuals and families (any age) |
| Income-based? | No (IRMAA surcharges exist, but not income-based eligibility) | Yes — eligibility depends on income and assets |
| Who funds it | Federal government only | Joint federal and state funding |
| Who administers it | CMS (federal) | Each state individually |
| Monthly premiums | Part B: $202.90/mo standard (2026) | Usually $0 for enrollees |
| Deductibles | Part A: $1,736 per benefit period; Part B: $283/yr (2026) | Minimal or none |
| Long-term care | Very limited (100 days skilled nursing) | Yes, covers nursing home/custodial care |
| Dental/vision/hearing | Not included in Original Medicare | Often included (varies by state) |
| Provider network | Any Medicare-accepting provider nationally | Medicaid-accepting providers (varies by state) |
Medicare: Age-Based Federal Insurance
Medicare was established in 1965 alongside Medicaid, but with a different purpose. It is funded entirely by the federal government through a combination of payroll taxes (the Medicare trust fund), monthly premiums paid by beneficiaries, and general tax revenue. The program is uniform nationwide — the same rules, the same premiums, and the same benefit structure apply in every state.
Medicare has four main parts:
- Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care (limited), and some home health care. Free for most beneficiaries with 40+ work quarters.
- Part B (Medical Insurance): Covers outpatient care, doctor visits, preventive services, and durable medical equipment. Standard premium: $202.90/month in 2026.
- Part C (Medicare Advantage): Private plan alternative that bundles A and B, usually with Part D. Average premium: $18/month in 2026, plus Part B premium.
- Part D (Prescription Drug Coverage): Standalone or bundled drug plans. Average premium: ~$34.50/month in 2026; $2,100 out-of-pocket cap.
Medicaid: Income-Based State-Federal Program
Medicaid covers a much broader population than its name "medical assistance" might suggest. It covers children, pregnant women, adults below certain income thresholds, people with disabilities, and elderly individuals who meet income and asset tests. Because Medicaid is administered by states with shared federal funding, the specific rules — including who qualifies, what's covered, and how much providers are paid — vary significantly from state to state.
2026 Federal Poverty Level (FPL) Thresholds
Many Medicaid eligibility rules are tied to the Federal Poverty Level. For 2026:
- Single person: $15,650/year
- Couple: $21,150/year
Most states set Medicaid eligibility at 138% FPL for adults under the ACA expansion ($21,597 for a single person in 2026). For elderly and disabled Medicaid, rules differ and asset limits may apply.
Dual Eligibility: Qualifying for Both
Approximately 12 million Americans qualify for both Medicare and Medicaid simultaneously — they are called "dual eligibles" or "full duals." This typically includes elderly individuals who have spent down their assets and whose income falls below Medicaid thresholds, as well as low-income disabled individuals under 65 who receive SSDI.
When someone is dual eligible, Medicaid generally acts as a secondary payer, helping to cover what Medicare doesn't pay, including:
- Medicare Part B and Part D premiums
- Medicare deductibles and coinsurance
- Long-term care and nursing home costs not covered by Medicare
- Additional dental, vision, hearing, and personal care services
Medicare Savings Programs: A Bridge for Low-Income Medicare Enrollees
Even if you don't fully qualify for Medicaid, you may qualify for a Medicare Savings Program (MSP) — a Medicaid program that specifically helps low-income Medicare beneficiaries pay for Medicare costs.
| Program | Acronym | Income Limit (Single, approx.) | What It Pays |
|---|---|---|---|
| Qualified Medicare Beneficiary | QMB | ~100% FPL ($15,650) | Part A & B premiums, deductibles, and cost-sharing |
| Specified Low-Income Medicare Beneficiary | SLMB | ~120% FPL ($18,780) | Part B premium only |
| Qualifying Individual | QI | ~135% FPL ($21,128) | Part B premium (partial help) |
| Qualified Disabled and Working Individuals | QDWI | ~200% FPL ($31,300) | Part A premium (for those who must buy it) |
Enrolling in a Medicare Savings Program can save you $202.90/month or more in 2026 on your Part B premium alone. Use our Medicare Savings Program Eligibility checker to see if you qualify.