Understanding Medicare vs. Medicaid


While both Medicare and Medicaid are government-sponsored health care programs, there are important differences between the two.

A recent U.S. News report offers a deep dive into what sets these programs apart—here’s an overview of the key points.

Medicare is a federal health insurance program that covers Americans age 65 and older, as well as some younger people with disabilities. Medicaid, on the other hand, is a state and federal insurance program for low-income Americans of all ages.

Though both programs provide health care coverage, they differ in a few key ways. For one, Medicare is largely funded by payroll taxes, while Medicaid is funded by both state and federal taxes.

Medicare benefits are also more comprehensive than Medicaid benefits. Medicare covers a wider range of services, including:

  • Hospitalizations
  • Doctor’s visits
  • Prescription drugs
  • Preventive care

Medicaid benefits vary from state to state, but generally cover fewer services than Medicare.

Finally, eligibility requirements for the two programs differ. To be eligible for Medicare, you must be 65 or older, or under 65 and have a qualifying disability. To be eligible for Medicaid, you must have a low income and few assets.

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