Health Insurance 101: Medicaid vs. Medicare

It’s really easy to mix up these two public health insurance options.

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If you have a hard time remembering the difference between Medicaid and Medicare, you’re not alone. What’s important is that both of these public health insurance options help more people access health care.

In the United States, many people get their health insurance through their employer. That works for many families, but it’s not a perfect system and can leave many people uninsured. Whether you’re retired, have a disability, lost your job, or need a little financial assistance with pregnancy costs, Medicaid or Medicare may be able to help.

What Is Medicaid?

Medicaid offers health insurance for low-income Americans, as well as people with disabilities and pregnant women. In some cases, it also provides coverage for older adults if they are below a certain income level. In 2021, about 73.8 million individuals received coverage through Medicaid, according to the Centers for Medicare & Medicaid Services.

The purpose of Medicaid is somewhat simple: Low-income individuals who are uninsured may not be able to afford to see their doctors, pay for life-saving prescriptions, or get regular checkups to catch diseases early. Any existing conditions they have may worsen or lead to complications. They may be more likely to have emergency medical events that require ambulances and emergency room care. Medicaid isn’t just ethical: It reduces the burden on the healthcare system and the economy in general.

Life is unpredictable and your circumstances may change in a single moment. You can apply for Medicaid at any time, not just during “enrollment periods.” This can help make things easier because you won’t have to wait months to apply and receive care.

What Is Medicare?

Medicare offers health insurance for people 65 years and older. The purpose of Medicare is to cover older adults who may not have employment-based insurance after retiring—but they often have increased healthcare needs. It’s similar to the concept of Social Security: You're paying into a system throughout your life toward a program that will benefit you in retirement.

Medicare isn’t only for older adults. Younger people with disabilities or kidney failure may also qualify. That’s because these can put a financial strain on an individual, or make them inable to maintain a full-time job. Most of the time, people in these groups see specialists regularly, which is why having health insurance is crucial.

Just like with private insurance plans, people with Medicare generally pay copays and/or small premiums (monthly fees). And some older adults may also qualify for Medicaid, receiving health insurance that may be lower in cost or even free.

Understanding Your Options

No matter the reason you can’t access private health insurance, you’ll still have an option to access affordable health care. If you’re struggling to access health insurance or pay for your current plan, check out the Medicaid eligibility criteria and the Medicare eligibility criteria.