Medicare vs. Medicaid: What's the Difference?

The names are almost the same, which is most of the problem. Medicare and Medicaid were created by the same law on the same day in 1965, and ever since then people have been mixing them up at exactly the moment when it matters most.

Here is the short version. Medicare is mostly about your age. Medicaid is mostly about your income.

Medicare is health insurance run by the federal government. It works the same way in every state, and what you have saved does not affect whether you can get it. A retired teacher with a comfortable pension and someone living on very little both get the same Medicare.

You qualify if any of these is true:

• You are 65 or older
• You have received Social Security disability benefits for 24 months
• You have ALS, also called Lou Gehrig's disease, in which case Medicare starts as soon as your disability benefits do
• You have permanent kidney failure

Medicare comes in parts, and each one pays for a different setting:

• Part A covers hospital stays, including surgery while you are admitted, and hospice
• Part B covers outpatient care — doctor visits, scans, and most chemotherapy and radiation given in a clinic
• Part C, also called Medicare Advantage, is a private plan that replaces Parts A and B and usually adds drug coverage
• Part D covers prescriptions you pick up at a pharmacy

Medicare is not free. In 2026 most people pay $202.90 a month for Part B, plus a $283 yearly deductible, and then 20% of the cost of most outpatient care. That 20% has no yearly ceiling on its own, which is why many people add a supplement policy or choose a Medicare Advantage plan.

Medicaid is a joint program between the federal government and your state. Washington sets the ground rules and helps pay for it, but your state runs it — which means the rules, and sometimes even the name, change when you cross a state line. You might know it as Medi-Cal, MassHealth, TennCare, or Husky Health.

Medicaid is based on financial need. Every state has to cover certain groups, including children, pregnant women, and people who receive Supplemental Security Income. Most states have also expanded Medicaid to cover other adults with low income.

Do not rule yourself out. States count income differently than most people expect, they set their own limits, and some do not count savings at all. The application is free, and being turned down costs you nothing.

Medicaid usually costs very little — often no premium and only small copays, sometimes nothing at all.

What you're comparing	Medicare	Medicaid
Who it is for	Mostly people 65+, and people with certain disabilities	People with limited income, at any age
Who runs it	The federal government	Your state, with federal rules and funding
Does income matter?	No, for eligibility	Yes, that is the main test
Same in every state?	Yes	No — rules and names vary
What it costs you	Premiums, deductibles, coinsurance	Usually very little or nothing
Choice of doctor	Almost any doctor nationwide, under Original Medicare	Doctors who accept Medicaid in your state
When you can sign up	Around your 65th birthday, then set windows each year	Any time of year
Long-term nursing home care	Very limited	Yes, this is the main payer in the U.S.
Rides to appointments	Generally no	Often yes

About one in eight people on Medicare also have Medicaid. If you qualify for both, you are dually eligible, and the two programs stack rather than compete.

Medicare pays first. Then Medicaid picks up much of what Medicare leaves — the premiums, the deductible, the 20% coinsurance — and adds the things Medicare skips, such as long-term care and transport. For someone facing a long stretch of treatment, that combination can be the difference between manageable bills and impossible ones.

There is also a middle ground people miss. If your income is low but not low enough for full Medicaid, you may still qualify for a Medicare Savings Program, which pays your Part B premium and sometimes your deductibles and coinsurance too, or for Extra Help, which cuts prescription costs to a few dollars. Signing up for a Medicare Savings Program gets you Extra Help automatically.

Both cover cancer care — surgery, chemotherapy, radiation, scans, and hospital stays. The difference shows up in the details.

With Medicare, you can usually go anywhere in the country that accepts it, which matters if you want a second opinion or a specialist center far from home. The trade-off is your share of the bill, and with infused chemotherapy that share can grow quickly.

With Medicaid, your costs are very low, but the list of doctors and hospitals that take it can be narrower, and some states require approval before certain treatments. Ask early whether your cancer center accepts your state's Medicaid.

For Medicare, apply through Social Security. If you are already receiving Social Security benefits when you turn 65, you are usually enrolled automatically. Otherwise there is a seven-month window around your birthday, and signing up late can mean paying more for the rest of your life.

For Medicaid, apply through your state's Medicaid office. There is no enrollment window — you can apply any day of the year, and coverage can sometimes be backdated to cover bills you have already received.

You do not have to work this out alone. Every state has free counselors who will go through your situation with you, and they earn nothing whichever way you go. The financial counselor or social worker at your cancer center can also check what you qualify for, and it is their job to do it.