Medicare is Different Than Medicaid fact

The difference between Medicaid and Medicare

What is the Difference Between Medicare and Medicaid?

Medicare and Medicaid are both public health insurance. Medicare is primarily for 65 plus seniors. Medicaid is for low-income adults and children (CHIP). People can be dual-eligible for both.[1][2][3]

Medicare and Medicaid are both taxpayer-funded programs enacted by The Social Security Amendments of 1965, and overseen by CMS (the Centers for Medicare and Medicaid Services). Despite the similarities, Medicare and Medicaid are very different programs, and each has its particular mechanics, rule-sets, enrollment periods, and costs.

Both programs provide public funding for insurance costs, and neither provides or controls the delivery of healthcare (although private delivery is regulated by various related and unrelated legislation).

Medicare works generally the same way for all US citizens. It provides basic Original Medicare coverage, usually for a fee, to help seniors (and those with ESRD and disabilities) to afford medical costs as they get older. Assistance is offered to those who have lower incomes through state-run Medicaid programs, but how much medical costs a low income elderly or disabled Medicare enrollee might be responsible for depends on the state. Medicare rates may vary due to a number of other factors as well. Many recipients can choose private supplemental plans to improve cost-sharing and access to healthcare.[4]

Medicaid provides free or low-cost coverage, doesn’t include supplemental options, and covers all low-income children (through its counterpart CHIP), but only covers all adults in roughly 30 of the 50 states. This is because, although Medicaid was expanded by the Affordable Care Act, the Supreme Court ruled in a 2012 case by the NFIB that states could reject Medicaid (so most GOP-led states did, citing long-term costs as the main factor despite 90% federal funding until 2020, which tapers down over time).[5][6] State-run Medicaid programs can vary because of State Innovation Waivers.[7] Below we explain the basics of the very different Medicare and Medicaid, as the two programs are often confused due to their similar names.

TIP: Millions of Americans put off seeking medical care, not because they don’t have access to coverage, but because they don’t understand that the Affordable Care Act expanded free coverage to them. Spreading the word about Medicaid expansion could lead to saved lives and lower healthcare costs for all as this offsets cost incurred by taxpayers from people waiting until they get sick to get care.

TIP: To learn more about Medicare, check out’s page on Medicare vs. Medicaid.

Investopedia Video: Medicare Vs. Medicaid

When was the Origin of Medicare and Medicaid? – The Social Security Amendments of 1965

On July 30, 1965, President Johnson signed the Social Security Amendments which established Medicare and Medicaid, promising that they would “improve a wide range of health and medical services for Americans of all ages.” The modern political climate is largely a response to this and other Civil Rights reforms. What one party saw as the biggest achievement since the New Deal, the other saw as the overreach of Big Government. Shortly after this Nixon enacted the education reform that led to the student loan crisis, which was followed by the war on drugs. [8][9]

50 Years After LBJ’s “War on Poverty,” a Call for a New Fight Against 21st Century Inequality. Can a person pursue happiness when they are a victim of poverty and sickness? Is healthcare a human right? LBJ thought so; Reagan didn’t. Little has changed between the left and right since their time.

Ronald Reagan Speaks out Against Socialized Medicine. American Democracy is built on the principle that, “Life, Liberty and the Pursuit of Happiness” are rights, but the world is complex, and thus, even the mechanics behind the beloved Medicare program sparks a debate. This video shows how the criticism of “entitlement programs” was framed by libertarian Conservatives like Reagan in LBJ’s time.

TIP: Socialized healthcare implies public delivery of care; neither Medicare or Medicaid do this. They are subsidy programs that cover the insurance costs of private care. Medicare is technically a quasi-private program since private insurers participate. Socialized Medicine is a buzzword created by the AMA as propaganda. With this in mind, the overarching debate of government’s involvement in healthcare versus private industry is a valid and complex one.

The difference between Medicaid and Medicare

In simple terms, Medicare is for Seniors and Medicaid is for low-income children and adults.

Understanding Medicaid

Medicaid is a joint federal and state program that provides coverage to all low-income adults and children (in states that expanded Medicaid). [10]

This means that, in the 30 states that embraced the Affordable Care Act’s Medicaid expansion, ALL citizens with low incomes are guaranteed the right to access healthcare. Although not all private practices have to accept Medicaid, state-funded hospitals must accept it.

Medicaid can be accessed by getting local assistance, calling your state Medicaid office, or by simply showing up at a public hospital (people can also simply get assistance at HealthCare.Gov).

On the flip side of this, in states that rejected the expansion, there is a “Medicaid Gap” where low-income adults can be denied coverage based on factors outside income.

Before expansion, each state had its own rules, which often included more factors than income.

Today, in states that expanded Medicaid, everyone making less than 138% of the poverty level for their household size has access to free or low-cost Medicaid coverage. For children, the limits are often higher.

Although other programs have open enrollment periods, Medicaid and CHIP are offered 365 days a year.

Medicaid can start up to two months in retrospect for those in a bind. You can learn more about Medicaid expansion here or learn how to sign up for Medicaid here.

Understanding Medicare

Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).[11]

Medicare is more complicated than Medicaid in just about every way. Dual eligibility tends to be complicated as well.

There are two enrollment periods every year, an initial enrollment period, both private and public coverage, and many other factors to consider. (See Medicare open enrollment).

The most important Medicare advice is to enroll during your initial enrollment period when you turn 65. Failing to do so can mean higher fees for life.

Medicare may be “a federal program” in title, but the reality is that private companies sell supplemental Medicare plans. This means consumers have countless private choices that change wildly by region. This makes the chances of getting the wrong plan high, so sitting down with a local broker and your medical history is highly advised.

Since Medicare is so complex, we won’t try to explain it here. Rather, I suggest you browse our detailed Medicare section on (the other site we run).

TIP: Original Medicare includes Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). Supplemental Medicare options are also offered to “fill the gaps” in Medicare coverage. Supplemental Medicare options include Medigap, Medicare Advantage (Medicare Part C), and Medicare Prescription Drug Coverage (Medicare Part D) and are sold by insurance companies and other private companies approved by Medicare.

Article Citations
  1. What is the difference between Medicare and Medicaid?” HHS.Gov
  2. Dual Eligibles”
  3. Medicare Vs. Medicaid.
  4. Part A costs & Part B costs”
  5. ObamaCare Facts: Facts on the Affordable Care Act”
  6. Medicaid Financing: How Does it Work and What are the Implications?”
  8. The 1965 Medicare Amendment to the Social Security Act”
  9. LBJ 394 – Remarks With President Truman at the Signing in Independence of the Medicare Bill”
  10. Medicaid Home”
  11. Medicare”

Some people confuse Medicare and Medicaid, or don’t understand they are two different programs. There are a few was to misinterpret this, but regardless of misconceptions, they are both public tax payer funded programs that help ensure healthcare as a right. Medicare provides insurance for seniors and Medicaid for low income adults and children, but the exact details are a little more complex.

To learn more about healthcare reform in other countries, see Single Payer (most industrialized countries have had single payer since the 70’s and 80’s).

Author: Thomas DeMichele

Thomas DeMichele is the content creator behind,,, and other and Massive Dog properties. He also contributes to MakerDAO and other cryptocurrency-based projects. Tom's focus in all...

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