What’s The Difference Between Medicaid and Medicare?

When you approach age 65, or if you have certain disabilities, the health insurance landscape changes dramatically. Instead of private health insurance provided by an employer or purchased through an exchange, coverage through government programs becomes the primary form of health insurance. Many people have heard of the two main programs – Medicare and Medicaid – but may not know about the significant differences between them.

The two forms of government-provided health insurance are designed to address the needs of different groups of people and provide distinct benefits. Here is what you need to know about the differences between Medicare and Medicaid:


Established in 1966, Medicare is a federal program that covers most (but not all) healthcare costs for Americans 65 and up and those under 65 who have certain disabilities. Unlike Medicaid, Medicare eligibility is unrelated to your income or assets.

Nearly 63 million Americans receive healthcare coverage through Medicare. About 54 million Medicare enrollees are seniors over age 65, with the remainder being people with disabilities. According to the Congressional Budget Office, the federal government spent $683 billion on Medicare in fiscal year 2021, making it one of the single biggest government expenditures.

Medicare provides coverage under a few distinct ‘Parts.” Parts A and B generally cover hospital stays, doctors, and medical appointments. Part C offers Medicare beneficiaries the opportunity to buy additional coverage for dental, vision, hearing, and other specialties. Under Part C, those enrolled can buy Medicare Advantage plans, which provide these additional benefits. Part D, established in 2006, helps beneficiaries cover the costs of their prescription drugs.

While Medicare will cover most medical expenses, it isn’t free healthcare. Enrollees will still pay plenty of out-of-pocket expenses with Medicare for things like premiums, deductibles, coinsurance, and copays. And these costs can pile up and quickly drain retirement savings.

That is why so many seniors on Medicare also purchase private supplemental insurance coverage — also called Medigap plans — that can help fill in these significant gaps in Medicare coverage.


Medicaid is a jointly run state and federal program focused on providing health care services and coverage for lower-income Americans. In 2021, nearly 78 million Americans, including almost 33 million children, were enrolled in Medicaid, and in 2019, states and the federal government spent a combined $627 billion to provide this coverage.

While Medicaid was initially established to provide coverage to low-income children, pregnant women, parents of dependent children, the elderly, and individuals with disabilities, the Affordable Care Act allocated funding for states to expand coverage to non-elderly adults with income up to 133% of the federal poverty level.

Contact Every Way Health To Learn More About Medicare

As noted, Medicare covers many medical costs for seniors, but many expenses will still come out-of-pocket – unless you have Medicare supplemental insurance to make up for these gaps in coverage. If you need assistance in choosing the Medicare supplemental insurance plan that’s best for you, please contact Every Way Health at 877-460-3943.

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