I. The Basics of Medicare and Medicaid Program

  • Medicare is health insurance the federal government provides for senior citizens and some eligible adults with qualifying disabilities.
  • Medicaid is a joint program between the federal and state governments to insure low-income families, children, pregnant women, and other vulnerable groups with the basics of necessary healthcare.

Though the two programs overlap in places, and many people are eligible to get benefits from both programs, they differ in some important ways. This table provides a snapshot overview of the two programs:

Who is Eligible for Medicare and Medicaid
Age restrictionsOpen to seniors aged 62 and over, with some exceptionsNo age restrictions, though seniors and children may get special consideration for approval
Free or low-cost benefits at the point of servicePart A is free. A premium may be charged for other services.Many services are provided for free, though higher-income beneficiaries may pay a share of cost.
Income eligibilityNoYes
Program managed byFederal governmentFederal and state governments
Coverage for minor childrenNoYes
Coverage limitsUnlimited inpatient and hospice care, some limits to outpatient and prescription drug coverage, depending on plan detailsPayment for medically necessary services according to a fixed price schedule

II. The Basics of Medicaid

Medicaid provides comprehensive health insurance for children, disabled adults, pregnant women, parents of minor children, and families with limited income. Healthcare providers that accept Medicaid get paid for providing services for beneficiaries from both the federal and state government. Every state varies somewhat in the benefits its Medicaid program provides, as well as the eligibility criteria for receiving benefits, though income limitations are always based on the Federal Benefit Rate, with some adjustments for the local cost of living.

Medicaid covers all of the 10 Essential Services of Public Health for its members, with some states expanding covered services beyond the federal minimum standards. If you think anyone in your household qualifies for Medicaid, you can apply directly through the federal healthcare marketplace online, or by contacting program offices in your state:

StateAlternative NameWebsite
ArizonaArizona Health Care Cost Containment System (AHCCCS)https://www.azahcccs.gov/
ColoradoHealth First Coloradohttps://www.colorado.gov/hcpf/colorado-medicaid
DelawareDiamond State Health Plan (Plus)https://dhss.delaware.gov/dss/medicaid.html
FloridaStatewide Medicaid Managed Care Programhttps://www.myflfamilies.com/service-programs/access/map.shtml
IllinoisMedical Assistance Programhttps://abe.illinois.gov/abe/access/
IndianaHoosier Healthwise Hoosier Care Connect M.E.D. Works Health Indiana Plan (HIP) Traditional Medicaidhttps://www.in.gov/fssa/2408.htm
IowaIA Health Linkhttps://dhs.iowa.gov/dhs_office_locator
KansasKanCare Medical Assistance Programhttps://www.kmap-state-ks.us/Public/Beneficiary/default.asp
LouisianaBayou Health HealthyLouisianahttp://ldh.la.gov/index.cfm/subhome/1
MarylandMedical Assistancehttps://www.marylandhealthconnection.gov/
MichiganMedical Assistance or MAhttps://www.michigan.gov/mdhhs/0,5885,7-339-71547_4860—,00.html
MinnesotaMedical Assistance (MA) / MinnesotaCarehttps://www.health.state.mn.us/facilities/insurance/clearinghouse/public.html
MississippiMississippi Coordinated Access Network (MississippiCAN)https://medicaid.ms.gov/
MissouriMO HealthNethttps://mydss.mo.gov/msmed
New Hampshirehttps://www.dhhs.nh.gov/ombp/medicaid/index.htm
New JerseyNew Jersey FamilyCarehttps://www.state.nj.us/humanservices/dmahs/clients/medicaid/
New MexicoCentennial Carehttps://www.hsd.state.nm.us/mad/
New YorkMedicaid Managed Carehttps://www.health.ny.gov/health_care/medicaid/
North CarolinaDivision of Medical Assistance (DMA)https://medicaid.ncdhhs.gov/medicaid/
North DakotaNorth Dakota Medicaid Expansion Programhttp://www.nd.gov/dhs/services/medicalserv/medicaid/
OregonOregon Health Planhttps://www.oregon.gov/oha/HSD/OHP/Pages/index.aspx
PennsylvaniaMedical Assistance (MA)http://www.dhs.pa.gov/citizens/healthcaremedicalassistance/
Rhode IslandRI Medical Assistance Programhttp://www.dhs.ri.gov/
South CarolinaHealthy Connectionshttps://www.scdhhs.gov/
South Dakotahttps://dss.sd.gov/medicaid/
VermontGreen Mountain Carehttps://www.greenmountaincare.org/
WashingtonApple Healthhttps://www.hca.wa.gov/
Washington D.C.Healthy Familieshttps://dc.gov/service/medicaid
West Virginiahttps://dhhr.wv.gov/Pages/default.aspx
WisconsinForwardHealth / BadgerCarehttps://www.dhs.wisconsin.gov/medicaid/index.htm

III. The Basics of Medicare

Medicare is the federal health insurance program for seniors and eligible adults with disabilities. To qualify for coverage, applicants must be seniors aged 65 and over and U.S. citizens. Adults under age 65 may qualify for Medicare coverage if they have received Social Security Disability Income (SSDI) for at least 24 continuous months due to a medically diagnosed disability that prevents them from working, or if they have been diagnosed with end-stage renal disease.

Medicare covers nearly all of the medical services seniors need, along with dialysis for renal patients and hospice care for terminally ill beneficiaries. Benefits are provided under different parts of Original Medicare, designated by letter:

Part A

Medicare Part A coverage is automatically assigned to eligible seniors when they begin receiving Medicare benefits. This is a no-cost policy that pays for inpatient care, hospitalizations, and hospice care. Medications administered in the hospital, such as surgical anesthetics, are contained within Part A coverage.

Part B

Medicare Part B pays most or all of the cost for outpatient care. This includes visits to doctors’ offices and various kinds of therapy, including many substance abuse and mental health services. Some medications, typically those administered in the office, rather than taken by the patient at home, are covered under Part B. Part B coverage is not automatically assigned to Original Medicare beneficiaries, and because there is usually a monthly premium, seniors have the ability to opt out of the plan.

Part D

Medicare Part D is the program’s prescription drug benefit. This policy pays much of the cost of self-administered medications seniors may be prescribed, though a co-payment may be due at the point of service. As with Part B, seniors can opt out of Part D coverage in favor of their own policy.

Part C

Part C is the blanket term given to Medicare group plans that are provided by private sector insurance companies. These plans, which are also known as Medicare Advantage plans, vary by state, but they all have some features in common. Every authorized Medicare Advantage plan must provide all of the benefits available through Parts A and B. Many plans also include a Part D component to pay for seniors’ prescriptions, as well as a few extras, such as orthopedic devices and eyeglasses. Monthly premiums for Part C vary somewhat, with some plans costing participants $0 a month, while others range as high as $300. The average Medicare Advantage customer pays $29 a month for full coverage, though co-payments may be due at the point of service.

Open enrollment in Medicare, or in one of the Medicare Advantage plans available in your state, begins on the first day of the month, three months before you turn 65, and it ends on the last day of the third month after your birthday. The Medicare administration recommends applying for the plan you want as early as possible to avoid gaps in coverage, as prescription drug benefits take an average of three months to transfer over. Interested seniors can apply for Medicare online at www.SocialSecurity.gov, or by calling the program’s toll-free number at 1 (800) 772-1213. Applications for Medicare are also accepted in person at local Social Security Administration offices nationwide.


Does Medicare have an income restriction?

No. Medicare is open to all eligible seniors and other adults who meet program criteria, regardless of income. Many Medicare Advantage and other supplemental plans do charge premiums that vary with income and assets, however, so it is important to talk with an agent to be sure you fully understand your payments and coverage limits.

Can seniors use Medicaid?

Yes. Medicaid is open to all qualifying citizens and legal residents, regardless of age. Many seniors use Medicaid as a supplement to help manage the costs left unpaid by their Medicare coverage.

Do these programs accept applicants with pre-existing conditions?

Yes. Both Medicare and Medicaid are required by federal law to accept all qualified applicants, regardless of their health histories or pre-existing conditions. One exception to the rule is with Medicare Advantage and other supplemental plans. These private insurance options must accept applicants who sign up during open enrollment, regardless of their health history, but late applications are subject to review, pricing, and even denial based on normal actuarial statistics, including pre-existing conditions.

What do these programs cost?

Medicare Part A costs nothing to recipients. Parts B, C, D, and so on may charge a monthly premium, which may be set to $0 a month, depending on the coverage amount and where the beneficiary lives. Some Medicare Advantage plans cost more than this, though the details vary. There is no monthly premium for Medicaid coverage, and very low-income beneficiaries may get medical services with no share of cost or co-payment due at the point of service. Medicaid recipients with income or assets above a certain level may be required to pay an annual share of the cost before getting benefits. Many states’ Medicaid programs also recover spent costs from beneficiaries’ estates after they pass away, which is something to discuss with a senior planner.

Do veterans get Medicare or Medicaid?

Honorably discharged veterans of any branch of the U.S. military are generally eligible for health benefits from the Veterans’ Administration, as well as a TRICARE plan that covers themselves, their families, and their surviving spouses. In addition to that coverage, veterans who qualify for Medicare and/or Medicaid may take full advantage of either program or both, in addition to their military insurance.