Difference Between Medicare and Medicaid

Medicare vs Medicaid


Healthcare is an important matter. Even the government recognizes such a fact and has made legal provisions that provide and support the healthcare needs of its constituents. Some changes have been incorporated in to the health care programs through the Affordable Care Act introduced by U.S. federal government in 2010. Two of the most popular health care programs in the United States today are Medicaid and Medicare.

Not everyone though knows the real difference between Medicare and Medicaid. A lot of people even end up mistaking one for the other when they are actually very different even with the spelling. Medicare and Medicaid are two such programs supported by the government. Medicare is a federal-supported program associated with the Social Security. The program is available to all American citizens who are aged 65 years old or more. It also provides coverage for individuals at any age with certain disabilities and for those with End-Stage Renal Disease (ESRD) and is not, in any way, affected by the person’s income. (ESRD is permanent kidney failure requiring dialysis or a kidney transplant.)

Medicare is made up of four parts namely hospitalization coverage, coverage for doctor services and preventive services such as checkups, medical insurance – privately purchased insurance that serves as supplement coverage and has additional features and services, and coverage for prescription drugs.

This health insurance program is made for the public. It is paid for by the working individuals themselves while they are still a part of the workforce. They have to share the cost for Medicare benefits, including deductibles, coinsurance, co-payments and also have to pay for premiums. For persons with limited income and resources, there may be help from the state or Medicaid may help, if they are eligible for Medicaid.

People who are 65 years of age or older can use the Medicare program for their check-ups. The fourth part of the program was added in 2006 to provide aid in facing the rapidly growing costs of drugs and medications. Though Medicare provides comprehensive coverage, it does not cover some services such as hearing aids and long-term care.

Medicaid, on the other hand, is a program supported jointly by the federal and state government. It is designed to provide assistance for people with low income who are having a hard time in dealing with the medical costs as well as all other expenses a possible custodial care entails. Federal funding provides for as much as 50 percent of the Medicaid program of every state in the country with less affluent states receiving more than the affluent ones.

For an individual to be eligible for the Medicaid program, one has to fall within the set of requirements set for the recipients of Medicaid. Since it is partly funded by the state government, the state has a say on these requirements. Anyhow, the Affordable Care Act introduced in 2010 has made provisions to expand the eligibility starting from 2014. The general purpose of the program though is to assist the poor, so it is just natural for the states to help those whose liquid assets do not go beyond a few thousand dollars. Additional requirements for the program are set to make sure that it ends up serving certain groups that have been determined worthy and in need of the assistance. These groups include pregnant women, children, the elderly and the people with disabilities to name a few.

Medicaid coverage differs from state to state; anyhow certain benefits are included in every Medicaid program such as doctor visits, prescription drugs, hospital care, home health care, transportation services and nursing home care. It also includes mental health services for children.

Difference between Medicare and Medicaid

Medicare is a health insurance program for all citizens of U.S. whereas Medicaid is health coverage for low income group and people with disabilities.

Medicare is federal-supported program and Medicaid is a joint program by the state and the federal government. As such the eligibility and coverage for Medicaid vary from state to state.

Those who are still in the workforce have to share the cost for Medicare benefits whereas the cost sharing for Medicaid is extremely limited for most participants.

Medicare does not cover some services such as hearing aids and long-term care, Medicaid aid will cover many of those services not covered under Medicare.


The difference between Medicare and Medicaid does not create any problems with the healthcare assistance made available for everyone. Although they are different from each other in a number of ways, they work together in helping Americans deal with their healthcare needs and concerns.