Medicare vs. Medicaid: what’s the difference?

What each program is

Medicare is a federal program. You qualify by turning 65 or by having a qualifying disability, and your income doesn’t affect eligibility. It’s organized into the familiar parts — A, B, C, and D — covering hospital, medical, and drug costs.

Medicaid is run by each state within federal rules, and eligibility is based on limited income and resources. It tends to cover a broader set of services than Medicare, often at little or no cost to the person, and it’s the main payer for long-term nursing-home care, which Medicare does not cover.

The key differences

• Who qualifies: Medicare by age or disability; Medicaid by income and resources.
• Who runs it: Medicare is federal and the same nationwide; Medicaid is state-run and varies by state.
• What it costs you: Medicare has premiums and cost-sharing; Medicaid is low or no cost for those who qualify.
• Long-term care: Medicaid covers extended nursing-home stays; Medicare generally does not.

Having both: dual eligible

If you qualify for both, you’re "dual eligible." Medicaid then helps pay your Medicare costs — premiums and cost-sharing — and special Dual-Eligible plans coordinate the two so your out-of-pocket costs are very low. For many people, qualifying for both is the most complete coverage available.