Medicare vs Medicaid: Differences, Costs, Who Qualifies

The difference between Medicare and Medicaid is who each one is for. Medicare is federal health insurance for people 65 and older or with a qualifying disability, whatever their income. Medicaid is a federal and state program for people with limited income and resources, at any age. People with both are dual eligible, and Medicaid then helps pay their Medicare costs.

The names sound alike, both programs use federal money, and both pay doctors and hospitals. Past that, they work very differently. Medicare is insurance you earn by age or disability, while Medicaid is coverage you get because your income is low.

Which one you have decides what you pay each month, whether a nursing home is covered, and which office you apply through. This guide compares Medicare vs Medicaid on eligibility, 2026 costs and benefits, then explains what happens when you qualify for both.

Key Takeaways

• Medicare depends on age or disability. Medicaid depends on income and resources, with rules that differ by state.
• Medicare costs money in 2026: a $202.90 monthly Part B premium, a $283 Part B deductible and a $1,736 Part A deductible per benefit period. Medicaid out-of-pocket costs are capped at 5% of family income.
• Medicare does not pay for long-term custodial care. Medicaid is required to cover nursing facility services for people who qualify.
• About 12 million people have both. Medicaid helps with their Medicare costs; with full Medicaid, the state pays the Part B premium and Extra Help with drugs comes automatically.

What is the difference between Medicare and Medicaid?

No, Medicare and Medicaid are not the same. Medicare is a single national insurance program. The Centers for Medicare & Medicaid Services (CMS) sets one set of rules, one standard premium and one list of covered services for the whole country. Most people earn it by working and paying payroll taxes, then become eligible at 65.

Medicaid is a separate program in every state, DC and the territories, funded jointly by the federal government and each state. Federal law sets a floor of required groups and benefits, and each state builds on it. That is why a Medicaid income limit in Ohio can be very different from the one in Texas.

The two programs also serve different numbers of people. CMS data show 70.6 million people enrolled in Medicare as of June 2026. In the same month, Medicaid.gov counted 65,969,381 people in Medicaid and another 7,198,008 in CHIP.

Medicare vs Medicaid at a glance

The table below lines up the two programs on the points people ask about most. The sections after it explain each row in plain terms, with the 2026 numbers.

Medicare vs Medicaid comparison, 2026

Question	Medicare	Medicaid
Who it is for	People 65 and older; younger people with a qualifying disability, ESRD or ALS	People with limited income and resources, at any age
What it is	Federal health insurance	Federal and state health coverage for low income
Based on income?	Not for eligibility; higher earners pay more for Parts B and D (IRMAA)	Yes, plus assets for many seniors and people with disabilities
Who runs it	Federal government (CMS)	Each state, under federal rules
Monthly premium	Part B $202.90; Part A free for about 99%	Usually none; any costs capped at 5% of family income
Long-term nursing home care	Not covered (short skilled stays only)	Nursing facility services are a required benefit
Dental, vision, hearing aids	Not covered by Original Medicare	Optional; depends on your state
Prescription drugs	Part D plan, $2,100 out-of-pocket cap in 2026	Optional benefit, but every state covers it
Can you have both?	Yes. About 12 million people are dual eligible; Medicare pays first and Medicaid pays last
Renewal	No yearly renewal for Parts A and B	Once a year for most groups; every 6 months for many expansion adults from 2027
Where to apply	Social Security	Your state Medicaid agency

Who qualifies for Medicare?

Medicare.gov describes the program as “health insurance for people 65 or older who meet citizenship or residency requirements.” You may qualify earlier if you have a disability, End-Stage Renal Disease (ESRD) or ALS.

Income does not decide eligibility: a retired executive and a retired cashier get the same Medicare. Higher earners do pay a surcharge on Parts B and D, explained in the IRMAA guide.

For most people under 65, the disability route runs through Social Security Disability Insurance. Our guide to SSI vs SSDI explains which benefit leads to Medicare and which one leads to Medicaid instead.

Your first chance to sign up opens 3 months before the month you turn 65 and closes 3 months after it. If you already get Social Security benefits, you are usually enrolled automatically. If not, you sign up through Social Security, and missing the window can mean a lifetime late penalty on Part B.

Who qualifies for Medicaid?

Medicaid eligibility starts with income. Federal law requires states to cover certain groups, including low-income families, qualified pregnant women and children, and people who receive Supplemental Security Income (SSI). States then decide how far above that floor to go.

The biggest choice is the Affordable Care Act expansion, which covers nearly all adults under 65 with income up to 138% of the poverty level. The law sets 133%, and a standard 5% income disregard makes it 138% in practice.

As of October 1, 2026, KFF’s expansion tracker reports that 41 states, including DC, have adopted it. The 10 that have not are Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin and Wyoming.

In an expansion state, 138% of the 2026 federal poverty guideline works out to the amounts below. Some states take a few months to switch to each year’s new guidelines, so check your state’s current figure. The Medicaid income limits guide lists every state’s numbers for each group.

Parent income limits in the 10 non-expansion states

Without expansion, a parent’s chance of Medicaid depends on a state-set limit that can sit far below the poverty line. We converted KFF’s January 2026 parent limits into yearly dollars for a family of three, using the 2026 guideline of $27,320.

Medicaid limit for parents, family of three (GrantsHubUSA analysis of KFF data, January 2026 limits)

State	Limit, % of poverty line	About this much a year
Texas	15%	$4,098
Alabama	18%	$4,918
Mississippi	21%	$5,737
Florida	26%	$7,103
Kansas	38%	$10,382
Wyoming	43%	$11,748
South Carolina	67%	$18,304
Georgia	100%*	$27,320
Wisconsin	100%	$27,320
Tennessee	105%	$28,686
Any expansion state	138%	$37,702

A Texas parent of two earning more than about $341 a month is over the limit, while the same family in an expansion state qualifies up to about $3,142 a month. States set exact dollar limits and update them on their own dates, so confirm yours with the state agency. KFF’s percentages may rest on the prior year’s guideline, so the dollar amounts are approximate.

*KFF lists Georgia at 100% for January 2026, up from 29% a year earlier. Ask Georgia’s Medicaid agency which program that limit applies to before you count on it.

Seniors and people with disabilities face a second test: an asset limit on savings and property, set by the state. That test, and the five-year review of past gifts for nursing home care, is covered in the Medicaid look-back period guide.

In a non-expansion state, a working adult without children may not qualify for Medicaid at any income. Parents, pregnant women and children usually can, at limits the state sets. If you are turned down, the Marketplace at HealthCare.gov is the next stop.

Medicare vs Medicaid costs in 2026

For most budgets, cost is the biggest difference. Medicare has premiums, deductibles and coinsurance that most people pay every year. Medicaid usually has no premium, and federal rules cap what a state can charge.

What you pay in 2026

Cost	Medicare (Original)	Medicaid
Hospital premium	$0 for about 99%; otherwise $311 or $565 a month	Usually $0
Medical premium	$202.90 a month (Part B)	Usually $0
Hospital deductible	$1,736 per benefit period	Nominal, if any
Doctor visits	$283 yearly deductible, then usually 20%	Small copays at most
Long hospital stay	$434 a day for days 61 to 90	Covered
Skilled nursing facility	$217 a day for days 21 to 100	Covered when you qualify
Prescription drugs	Part D plan premium; out-of-pocket spending capped at $2,100	Covered in every state, small copays at most
Overall limit	None in Original Medicare	Costs capped at 5% of family income

The 2026 Medicare amounts above come from the CMS fact sheet released November 14, 2025. The Part B premium alone adds up to $2,434.80 a year. There is no yearly out-of-pocket maximum in Original Medicare, which is why most people add Medigap, a Medicare Advantage plan, or help from Medicaid.

If your income is low but too high for full Medicaid, a Medicare Savings Program can still pay the Part B premium. The Medicare Savings Programs guide has the 2026 income limits for QMB, SLMB and QI.

Is Medicare free after 65?

Part A is free for about 99% of people, because they or a spouse worked enough quarters. Part B is not free: you pay $202.90 a month in 2026 unless Medicaid or a Medicare Savings Program pays it for you.

What does each program cover?

Both programs pay for hospital stays, doctor visits, lab tests and home health care. The gaps are in long-term care and in the everyday services older adults need most.

What doesn’t Medicare cover?

Medicare.gov’s not-covered list includes these items and services:

• Eye exams for prescription eyeglasses
• Non-medical long-term care
• Cosmetic surgery
• Massage therapy
• Routine physical exams
• Hearing aids and exams for fitting them
• Concierge care
• Most dental care, such as cleanings, fillings, extractions and dentures

Medicare Advantage plans may add some of those as extras.

Medicaid works from a different list. Nursing facility services, home health and transportation to medical care are required in every state. Dental care, eyeglasses, dentures and personal care are optional, so whether you get them depends on where you live. Prescription drugs are technically optional too, but every state covers them.

Coverage side by side

Service	Original Medicare	Medicaid
Hospital and doctor care	Covered	Covered (required)
Nursing home, long-term	Not covered	Covered (required)
Home health care	Some home health care covered	Covered (required)
Rides to appointments	Not a standard benefit	Covered (required)
Dental	Most care not covered	Optional by state
Eyeglasses and eye exams	Not covered for glasses	Optional by state
Hearing aids	Not covered	Optional by state
Hospice	Covered (Part A)	Optional by state

Long-term care catches many families off guard. Medicare.gov’s long-term care page puts it plainly: “Medicare doesn’t pay for long-term care,” including care in a nursing home or in the community. It pays for a short skilled nursing stay after a hospital admission, not for help with daily living over months or years.

Can you have Medicare and Medicaid at the same time?

Yes. People with Medicare who also meet their state’s Medicaid limits are called dual eligible. KFF counts about 12 million of them.

Who qualifies for both Medicare and Medicaid?

Anyone who has Medicare through age or disability and also meets their state’s Medicaid income and resource limits. There are two levels. Full-benefit duals, about 8.6 million people, get Medicare plus all Medicaid benefits, which can add long-term care and, depending on the state, dental and vision coverage.

Partial-benefit duals get Medicare plus a Medicare Savings Program that pays their premiums and, at the QMB level, their deductibles and coinsurance, but not other Medicaid services.

When you have both, Medicare pays first and Medicaid pays last, after any other insurance. Medicare.gov’s Medicaid page lists what full Medicaid adds: the state pays your Part B premium, you get Extra Help automatically, and Medicaid may pay for drugs and services Medicare does not cover.

Your prescriptions move to Medicare. Dual eligible people are enrolled in a Medicare drug plan automatically, and Extra Help keeps the copays low. The Extra Help guide shows the 2026 copay amounts.

Many dual eligible people can also join a Dual Eligible Special Needs Plan (D-SNP), a Medicare Advantage plan built for people with both programs. In some states, integrated D-SNPs also deliver Medicaid benefits through the same plan. The comparison of Medicare help for low-income seniors sets these plans beside the other options.

Which is better, Medicare or Medicaid?

Most people cannot choose between Medicare and Medicaid. Your age, disability status and income decide which program you qualify for. The more useful question is what each one leaves you paying.

For a person with low income, Medicaid is usually the stronger coverage: almost no premiums, capped costs and long-term care. Medicare offers a national network and the same rules in every state, but it leaves real costs and gaps. That is why having both is often the best outcome.

If you are 65 or older with modest savings and a small Social Security check, check Medicaid and the Medicare Savings Programs before assuming you are over the limit. States can set higher limits than the federal floor, and some count fewer of your assets.

Which program fits your situation?

The three households below are examples we built from the 2026 limits on this page, not real people. Each one shows how age, income and savings push a person toward one program, the other, or both.

Example 1: a 67-year-old retiree with a pension

Dana is 67 and gets $2,600 a month from Social Security and a small pension. She has Medicare because of her age, and her income is far above any Medicaid limit for her household. She pays the $202.90 Part B premium herself.

Her real decision is not Medicaid; it is how to cover what Original Medicare leaves. That usually means a Medigap policy or a Medicare Advantage plan, a choice the Medicare Advantage vs Original Medicare guide breaks down.

Example 2: a 45-year-old cashier in an expansion state

Marcus is 45, lives alone in Ohio, and earns about $1,700 a month, or $20,400 a year. He is too young for Medicare and has no disability. Ohio expanded Medicaid, and his yearly income is under the $22,025 figure for one person.

He applies through the state and qualifies. Once Ohio’s work requirement starts (the federal deadline is January 1, 2027), he will need to show 80 hours of work a month at each 6-month check. His full-time job already meets that, so the main risk is a renewal letter he does not answer.

Example 3: a 72-year-old widow living on Social Security

Rosa is 72, gets $1,200 a month from Social Security and has $5,000 in savings. She has Medicare, but the Part B premium takes a sixth of her check. Her income is under the $1,350 monthly limit for the Qualified Medicare Beneficiary program, and her savings are under its $9,950 resource limit.

She applies to her state Medicaid office. QMB then pays her Part B premium, her deductibles and her coinsurance, and she gets Extra Help with drugs automatically. Depending on her state’s limits, she may also qualify for full Medicaid, which would add long-term care if she ever needs it.

Where does CHIP fit in?

The Children’s Health Insurance Program is Medicaid’s partner for kids. It covers children in families that earn too much for Medicaid but cannot easily afford private coverage. In June 2026, CHIP covered 7,198,008 people, nearly all of them children, on top of the children enrolled in Medicaid itself.

For families, one application covers both. The state checks the child for Medicaid first and, if the family income is too high, moves the application to CHIP. The CHIP income limits guide lists each state’s cutoffs.

Medicare has no children’s program. A child with End-Stage Renal Disease can sometimes qualify for Medicare through a parent’s work record, but almost every child with public coverage gets it through Medicaid or CHIP.

How to apply for Medicare and Medicaid

The programs use different front doors. Apply for Medicare through Social Security, online, by phone or at a local office, unless you are enrolled automatically.

Apply for Medicaid through your state Medicaid agency. You can also apply through HealthCare.gov, which sends your details to the state.

1. Check your Medicare start date and sign up during your 7-month window if you are not enrolled automatically.
2. Gather proof of income, bank statements and identity documents before you apply for Medicaid.
3. Apply for Medicaid even if you think you are slightly over the limit; the state makes the final call.
4. If you have Medicare, ask the Medicaid office to also screen you for a Medicare Savings Program.
5. Open every letter from the state, because missing a renewal form ends coverage.

Free help exists in both systems. Each state has a State Health Insurance Assistance Program (SHIP) for Medicare questions, and 1-800-MEDICARE (1-800-633-4227) answers general ones. Our Medicaid program page links to every state agency.

Medicaid changes coming in 2027

The 2025 federal budget law brings major Medicaid changes for working-age adults. Under the CMS interim final rule, states must generally start Medicaid work requirements by January 1, 2027.

The rule covers adults ages 19 to 64 in the expansion group who are not enrolled in Medicare. A state making a good-faith effort can get a federal delay until no later than December 31, 2028, according to KFF’s work requirement tracker.

Those adults will need to show 80 hours a month of work, community service, a work program or half-time school, unless they qualify for an exemption. Parents and caretakers of children under 14 are among the exempt groups. States must also check eligibility every 6 months instead of once a year.

People enrolled in Medicare are outside these rules, and Medicare itself has no work requirement. If you are under 65 on expansion Medicaid, watch your mail closely in 2027, because a missed report can end coverage even when you still qualify.

Estate recovery and other rules people miss

Medicaid can ask to be repaid after you die. For people 55 and older, states must seek repayment from the estate for nursing facility care and home and community-based services. Related hospital and drug costs are included too. Medicare has no estate recovery.

Estate recovery has limits. A state may not recover while a spouse, a child under 21, or a blind or disabled child of any age survives, and every state must have a hardship waiver process. Planning ahead with an elder law attorney can protect a home in many cases.

Two more traps: Medicare’s Part B late enrollment penalty can last as long as you have Part B, and Medicaid renewals arrive by mail. Keeping your address current with both Social Security and your state Medicaid office avoids most surprises.

What mistakes do people make with Medicare and Medicaid?

Most costly errors come from assuming one program works like the other. These five come up often, and each is avoidable once you know the rule.

1. Expecting Medicare to pay for a nursing home. It covers a short skilled stay after a hospital admission, then stops. Long-term custodial care falls to savings, private insurance or Medicaid.
2. Missing the first sign-up window. If you are not enrolled automatically and skip the 7 months around your 65th birthday, the Part B penalty can follow you for as long as you have Part B.
3. Not applying because of a guess about income. States can use higher limits than the federal ones, and some ignore part of your savings. Let the state decide.
4. Throwing away Medicaid mail. Renewal forms come by post, and from 2027 many working-age adults will get them every 6 months.
5. Fearing the state will take the house right away. Estate recovery happens after death, cannot happen while a spouse, a child under 21 or a blind or disabled child survives, and every state must offer a hardship waiver.

If any of these apply to you, a free counselor at your State Health Insurance Assistance Program can check your situation in one call.

The bottom line on Medicare vs Medicaid

Medicare is the program you grow into at 65 or reach through a disability, and it costs real money every month. Medicaid is the program you qualify for when money is tight, and it costs little or nothing. For about 12 million people, the two programs work together.

If you have Medicare and struggle with the $202.90 premium or the 20% coinsurance, apply to your state for Medicaid or a Medicare Savings Program now. If you are under 65 with low income, check whether your state expanded Medicaid. The Medicare program page walks through enrollment step by step.