The Difference Between Medicare and Medicaid

The Difference Between Medicare and Medicaid

Medicaid vs Medicare

Health insurance can be a complicated subject to fully wrap your head around, especially when it comes to government programs. In fact, the two main government programs, Medicare and Medicaid, are commonly confused for one another. The following is a breakdown of the differences between Medicare vs. Medicaid to give you a better understanding of health insurance in general.


Medicare vs. Medicaid

Both Medicare and Medicaid are federal healthcare programs that were created back in 1965 as a way to help older, low-income Americans to buy private health insurance. The idea of these programs was to have the healthy and affluent families of the country help share the financial burden of health insurance with sick and low-income families.


Medicare is a federal health care program that provides more affordable health care coverage to Americans who are either over the age of 65 or who have a severe disability. The income of those who apply does not factor into the qualification process.  Medicare consists of four different parts that cover different health care services. These include:

  • Part A – Part A consists of hospital insurance. Patients will be covered for hospital and post-hospital facility care in addition to home health care. Part A is free to patients who have paid Social Security taxes for at least 40 quarters. Those who paid Social Security taxes for between 30 and 39 quarters pay a standard $227 monthly premium, while anyone who has paid for less than 30 quarters must pay $413 for Part A coverage.
  • Part B – Patients will be covered for the majority of their doctor fees and lab costs in addition to outpatient care, which includes treatments like physical therapy. The standard premium for Part B coverage is $134 a month, but most patients who receive Social Security benefits pay less. The deductible is only $183 a month and copayments under this coverage is 20 percent.
  • Part C – Part C is a private Medicare health plan. These plans are known as Medicare Advantage Plans, and they vary depending on the plan. Although they offer the same benefits as Parts A and B (known as “Original Medicare”), there are different rules, costs and restrictions. You may have to pay a monthly premium for this type of coverage in addition to the Part B premium.
  • Part D – Part D provides patients with outpatient prescription drug coverage. It’s only provided via private insurance providers that have contracts with the government.



Unlike Medicare, Medicaid is a government assistance program. It also helps provide free insurance to lower-income individuals, but unlike Medicare, patients are qualified based on income as well as age and disability status. Only in some cases is a small copayment required. Plus because it’s a federal-state program, it can vary from state-to-state.

As you can see, when it comes to comparing Medicare vs. Medicaid, both are federal programs that help older, low-income and disabled Americans obtain insurance; however, Medicare makes insurance more affordable whereas Medicaid offers free coverage to those who qualify.

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