Medicare and Medicaid are two separate, government-run programs that were created in 1965 in response to the inability of older and lower-income Americans to buy private health insurance. They were part of President Lyndon Johnson’s “Great Society” vision of a general social commitment to meeting individual social, economic, and health care needs. Medicare and Medicaid are social insurance programs that allow the financial burdens of illness to be shared among healthy and sick individuals, and affluent and lower-income families. Medicare and Medicaid are different in several respects: they are run and funded by different parts of the government and primarily serve different groups.
- Medicare is a federal program that provides health coverage if you are 65 and older or have a severe disability, no matter your income.
- Medicaid is a state and federal program that provides health coverage if you have a very low income.
- If you are eligible for both Medicare and Medicaid (dually eligible individual), you can have both, and they will work together to provide you with health coverage at very low cost to you.
Also know that while Medicare and Medicaid are both health insurance programs administered by the government, there are differences in covered services and cost-sharing. Make sure to call 1-800-MEDICARE or contact your local Medicaid office to learn more about Medicare and Medicaid costs and coverage, especially if you are a dually eligible individual.
Medicaid is a federal and state program that provides health coverage for certain people with limited income and assets. Each state runs different Medicaid-funded programs for different groups of people, including:
- Older adults
- People with disabilities
- Pregnant people
- Parents and/or caretakers of children
All states also have Medicaid programs for people with limited incomes and assets who need nursing home care, long-term care services, and home health care services. Some states also have programs for individual adults who don’t fit any of these categories.
Each state uses financial eligibility guidelines to determine whether you are eligible for Medicaid coverage. Generally, your income and assets must be below a certain amount to qualify, but this amount varies from state to state and from program to program. You are eligible for Medicaid if you fall into an eligible group and meet that group’s financial eligibility requirements.
If you are eligible for Medicare and Medicaid (dually eligible), you can enroll in both. Medicaid can cover services that Medicare does not, like long-term care. It can also pick up Medicare’s out-of-pocket costs (deductibles, coinsurances, copayments).
Some states offer a Medicaid spend-down program or medically needy program for individuals with incomes over their state’s eligibility requirements. A spend-down program allows you to deduct your medical expenses from your income so that you can qualify for Medicaid. Contact your local Medicaid office to learn if a spend-down is available in your state.