Medicare vs. Medicaid: Understanding the Differences and Dual Eligibility

Page Reviewed / Updated - June 2019

What are the Differences Between Medicare and Medicaid?

Medicare is a federal health insurance program open to Americans aged 65 and older, and those with specific disabilities who are under the age of 65. Medicaid, a combined state and federal program, is a state-specific health insurance program for low-income individuals with limited financial means, regardless of their age.

Medicare, generally speaking, offers the same benefits to all eligible participants. However, coverage is divided into Medicare Part A, Part B, and Part D. Medicare Part A is for hospice care, skilled nursing facility care, and inpatient hospital care. Medicare Part B is for outpatient care, durable medical equipment, and home health care. Part D is for prescription coverage. Not all persons will elect to have coverage in all three areas. In addition, some persons choose to get their Medicare benefits via Medicare Advantage plans, also called Medicare Part C. These plans are available via private insurance companies and include the same benefits as Medicare Part A and Part B, as well as some additional ones, such as dental, vision, and hearing. Many Medicare Advantage plans also include Medicare Part D.

Medicaid is more comprehensive in its coverage, but the benefits are specific to the age group. Children have different eligibility requirements and receive different benefits from low-income adults and from elderly or disabled persons.

Did You Know?  Free assistance is available for seniors to help them determine their Medicaid eligibility.  Learn more.

Medicare vs. Medicaid Compare Benefits

In the context of long term care for the elderly, Medicare’s benefits are very limited. Medicare does not pay for personal care (also known as custodial care or non-medical care). Medicare will pay for a very limited number of days (no more than 100 days following hospitalization for a minimum of 3 days) of skilled nursing (also referred to as nursing home care). Medicare will also pay for some home health care, provided it is medical in nature. Starting in 2019, some Medicare Advantage plans started offering long term care benefits. These services and supports are plan specific, but may include adult day care, respite care, home modifications, personal care assistance, meal delivery, and light housekeeping. 

Medicaid, being state run, has different benefits in each state. Generally speaking, Medicaid pays for nursing home care, and through home and community based services waiver programs, may pay for home care, personal care, personal emergency response systems, homemaker services (laundry, housekeeping, shopping for groceries, and preparation of meals), congregate meals / home delivered meals, and services and supports in assisted living and adult foster care. To avoid confusion, it is worth noting that Medicaid is referred to by different names in different states. For example, in California it is called Medi-Cal, in Kansas it is called KanCare, and in Massachusetts it is called MassHealth.

How Does Medicare’s Eligibility Requirements Compare to Medicaid’s?

Eligibility in 2019 Medicare Medicaid
Age Limit 65 and older No age limit
Income Limit No income limit Approximately $2,313 / month*
Asset Limit No asset limit Approximately $2,000**
Health Restrictions None Some depending on program / waiver
*Some states have "spend-down" Medicaid in which income limits are considered relative to medical bills and care costs. This is also referred to as the medically needy pathway to eligibility.
**Varies dramatically by state, and not all eligibility groups have an asset limit.
 
 

Can One Have Dual Eligibility for both Medicare and Medicaid?

Yes, Medicare and Medicaid are not mutually exclusive programs. Persons who are eligible for both are referred to as having Dual Eligibility, Dual Eligibles, or often simply “Duals”. Medicare is the first payer of covered benefits, while Medicaid is the secondary payer. Typically, Medicaid will pay for Medicare premiums and co-payments for dual eligibles. In fact, many states have special programs intended to make it easier for seniors to manage their dual eligibility status as it can be confusing to know where to turn for what services. This is generally in the form of managed care.

 Did You Know?  There are also programs called Medicare Saving Programs for low-income seniors that don’t quite qualify for Medicaid.