Medicare and Medicaid are both U.S. government programs that help people pay for health care, but they’re designed for different groups and work in different ways. They were both created in 1965 and are funded by taxpayers. Because their names sound so similar, it’s easy to mix them up.
Medicare is mainly for people aged 65 and older or for those under 65 with certain disabilities. It doesn’t depend on how much money you make.
Medicaid, on the other hand, helps people of all ages who have a low income. It’s often the safety net for those who don’t have access to other health coverage.
✅ Medicare Basics
Medicare is split into four parts, each covering different types of care:
Part A – Hospital Coverage
Part A helps pay for hospital stays. Most people don’t have to pay a monthly premium for this if they or their spouse worked and paid Medicare taxes for at least 10 years. However, there are still deductibles and coinsurance costs.
Part B – Medical Insurance
Part B covers doctor visits, lab tests, X-rays, wheelchairs, outpatient surgeries, and preventive care like flu shots. If you qualify for Part A, you can also get Part B.
In 2025, the standard monthly premium for Part B is $185, which usually gets taken out of your Social Security check. If your income is over $106,000 (or $212,000 for couples), you’ll pay more.
Many people also buy Medigap (Medicare Supplement Insurance) to help cover the out-of-pocket costs Medicare doesn’t fully pay for. Just note: If your doctor doesn’t accept Medicare, they won’t accept Medigap either.
Part C – Medicare Advantage
Part C is offered by private companies approved by Medicare. It includes everything in Parts A and B, and often adds extras like prescription drug coverage, vision, dental, and hearing services.
These plans usually have lower out-of-pocket costs if you stick with in-network doctors. But you may need pre-approval for some services, which could slow things down. Make sure to check if the plan fits your health needs.
Part D – Prescription Drugs
Part D helps pay for your prescription medications. You’ll pay monthly premiums, a yearly deductible, and copays for drugs. If you’re already on a Medicare Advantage plan (Part C), you usually can’t get a separate Part D plan.
🗓 Open Enrollment happens every year from October 15 to December 7.
Also Read: How do I Insure Elderly Parents Under My Plan?
💵 2025 Medicare Costs Overview
| Coverage | Cost |
|---|---|
| Part A Premium | Free (if 40+ work quarters); otherwise, up to $518/month |
| Part A Deductible | $1,676 per benefit period |
| Part B Premium | $185/month |
| Part B Deductible | $257, then 20% of costs |
| Part C & D Premiums | Varies by plan |
🏥 What About Medicaid?
Medicaid is a joint federal and state program that helps people with low income cover health care costs, including long-term care like nursing homes. It covers people of all ages. Children in families that earn too much for Medicaid may qualify for CHIP (Children’s Health Insurance Program).
Medicaid Eligibility
Each state runs its own Medicaid program, so eligibility and benefits can differ. Thanks to the Affordable Care Act (ACA), many low-income U.S. citizens and legal residents qualify—especially if they earn less than 150% of the federal poverty level.
However, not all states chose to expand Medicaid under the ACA, so your eligibility may depend on where you live.
For most people on Medicaid, there’s no cost for covered services.
Medicaid After 65
If someone on Medicaid turns 65, they become eligible for both Medicare and Medicaid. In that case, Medicaid might continue to help by paying Medicare premiums or covering services Medicare doesn’t.
Also Read: How do Insurance Premiums Work?
📋 Medicaid Benefits (Basics)
While benefits vary by state, all Medicaid programs must cover:
- Hospital stays (inpatient & outpatient)
- Doctor visits
- Lab tests & X-rays
- Nursing facility care
- Home health services
- Transportation to medical appointments
- Family planning & maternity care
- Services from nurse midwives and pediatric nurse practitioners
States can also offer more, like:
- Prescription drugs
- Vision and dental care
- Physical therapy
- Mental health services
- Long-term care and nursing homes
In fact, Medicaid is the biggest provider of long-term care in the U.S. It often steps in when someone runs out of money and needs help covering the cost of nursing home care.
