The main difference between Medicaid and Medicare is that Medicare is a federal program that provides health coverage for persons age 65 and older or who are disabled, regardless of income, while Medicaid is a state-administered program that provides health coverage for persons with very little income regardless of age, according to Nolo. Medicare is an entitlement program; participants must pay into the program by paying Social Security taxes during their working years.
Nearly everyone age 65 and older and those who are receiving Social Security disability are eligible for Medicare. Medicare provides Part A hospital coverage that also covers nursing home care and home health treatment. Part B Medicare plans cover the cost of seeing a doctor and paying for durable medical equipment. Part D Medicare coverage pays for prescription medications.
Medicaid is for needy individuals, including those who demonstrate financial need and are receiving Medicare. It provides comprehensive care both on an inpatient and outpatient basis, dental care and prescription drug coverage.
It is possible to be eligible for both Medicare and Medicaid at the same time. Some people meet separate eligibility requirements for each program. When this happens, Medicaid generally pays for most of the premiums, copayments and deductibles for Medicare Part A and B premiums, according to Nolo.