doane paWhen it comes to public healthcare programs in the United States, Medicaid and Medicare are often mentioned together. While both programs aim to provide access to essential healthcare services, they serve different groups, operate under different structures, and have different eligibility criteria.
This guide focuses on Medicaid, offering a clear understanding of what it is, who qualifies, what it covers, how much it costs, and how it differs from Medicare. Knowing these details can help you or your loved ones make more informed healthcare choices.
What Is Medicaid?
Medicaid is a joint federal and state program that provides healthcare coverage for individuals and families with limited income and resources. Created in 1965 alongside Medicare, Medicaid is designed to ensure that vulnerable populations have access to necessary medical care.
Unlike Medicare—which is based primarily on age or specific health conditions—Medicaid eligibility is mostly income-driven. The program plays a critical role in supporting low-income families, children, pregnant women, people with disabilities, and elderly individuals who need long-term care.
Each state runs its own version of Medicaid within federal guidelines, which means that benefits and requirements can differ significantly from one state to another.
How Medicaid Is Structured
Medicaid is unique in that it is both federally supported and state administered. The federal government establishes certain baseline requirements, but each state has the flexibility to tailor its Medicaid program to meet local needs.
Key Features:
- Joint Funding: Both state and federal governments share the financial responsibility.
- State Control: States determine how the program operates, including who qualifies and which services are covered.
- Income-Based Eligibility: Qualification is generally based on household income, size, and certain demographic factors.
States that chose to expand Medicaid under the Affordable Care Act (ACA) have broadened coverage to include adults under 65 with incomes up to 138% of the Federal Poverty Level (FPL). However, not all states opted into this expansion.
Who Can Get Medicaid?
Eligibility for Medicaid varies by state, but in general, the program is designed to help individuals and families with low incomes. Federal guidelines require states to cover certain groups, while allowing flexibility to expand coverage to others.
Common Eligibility Groups:
- Low-income adults, especially in states that expanded Medicaid under the ACA
- Children and teens in low-income households
- Pregnant women who meet income criteria
- Elderly individuals with limited income and assets
- People with disabilities
Eligibility is usually determined by factors such as income level, household size, age, and medical need. States may use Modified Adjusted Gross Income (MAGI) to assess financial eligibility for most applicants.
If you’re unsure about your eligibility, you can apply through your state’s Medicaid office or the federal health insurance marketplace.
What Does Medicaid Cover?
One of the most beneficial aspects of Medicaid is the wide range of healthcare services it covers. States must provide certain mandatory benefits but also have the option to include additional services.
Required Medicaid Benefits:
- Inpatient and outpatient hospital care
- Physician visits
- Laboratory tests and X-rays
- Preventive services and immunizations
- Nursing facility care
- Home health services
- Family planning and prenatal care
Optional Services States May Offer:
- Prescription medications
- Dental care
- Vision and hearing services
- Mental health and substance use treatment
- Personal care and assistance with daily living
- Long-term care and nursing home coverage
- Transportation to medical appointments
Because each state can decide what optional benefits to offer, the scope of Medicaid coverage can vary. Some states may offer more extensive services, such as adult dental care, while others provide more limited support.
Medicaid Costs: What Will You Pay?
Medicaid is designed to be affordable, especially for people with limited financial resources. Many Medicaid recipients pay little to nothing out-of-pocket for their healthcare services.
Cost Breakdown:
- Premiums: Most enrollees are not required to pay monthly premiums.
- Copays: If applicable, copayments are usually low and vary based on income.
- Deductibles: Often not required under Medicaid.
- Out-of-Pocket Limits: States must cap total cost-sharing to 5% of a household’s income over a 12-month period.
Some states may require modest payments from individuals with slightly higher incomes or for non-emergency services, but Medicaid remains one of the most affordable healthcare options available.
What Is Medicare?
While Medicaid is based on income and other qualifying factors, Medicare is primarily designed for older adults and certain individuals with disabilities. It is a federal health insurance program that typically covers:
- People aged 65 and older
- Younger people with qualifying disabilities
- Individuals diagnosed with End-Stage Renal Disease (ESRD) or ALS
Medicare Includes Four Parts:
- Part A – Covers inpatient hospital care and limited nursing facility stays
- Part B – Covers outpatient care, doctor visits, and preventive services
- Part C (Medicare Advantage) – Offers bundled plans through private insurers that include Parts A and B, and often Part D
- Part D – Provides prescription drug coverage
Unlike Medicaid, Medicare requires enrollees to pay premiums, deductibles, and coinsurance. Most people receive Part A for free but must pay for Parts B and D.
Medicaid vs. Medicare: Key Differences
While Medicaid and Medicare share the goal of providing access to healthcare, they differ in major ways:
| Category | Medicaid | Medicare |
|---|---|---|
| Eligibility | Based on income and other needs | Based on age (65+) or certain disabilities |
| Funding | Jointly by federal and state governments | Federally funded |
| Administration | Run by states | Federally administered |
| Coverage | Varies by state; often includes long-term care, dental, and more | Standardized; hospital, medical, and prescription coverage |
| Cost to Beneficiaries | Often free or very low cost | Includes premiums, deductibles, and coinsurance |
| Enrollment Period | Available year-round for those who qualify | Limited enrollment windows annually |
Can Someone Have Both Medicaid and Medicare?
Yes. Some individuals qualify for both Medicaid and Medicare—known as dual eligibility. This typically applies to seniors or people with disabilities who meet Medicaid income requirements.
Benefits of Dual Eligibility:
- Medicaid can help cover Medicare premiums, deductibles, and copays
- Access to additional services not covered by Medicare, such as long-term care
- Some may qualify for special Medicare Savings Programs or Dual Eligible Special Needs Plans (D-SNPs)
If you or a loved one is dual-eligible, Medicaid acts as a secondary payer to help lower out-of-pocket costs and expand access to necessary care.
The Broader Impact of Medicaid
Medicaid plays a vital role in the U.S. healthcare system, providing a safety net for over 80 million Americans. It also supports hospitals, nursing homes, and health centers—especially in rural and underserved areas.
Why Medicaid Matters:
- Promotes Health Equity: Helps bridge the gap in healthcare access for low-income communities
- Supports Children’s Health: Covers nearly half of all U.S. children
- Improves Outcomes: Encourages preventive care, reducing emergency visits and hospitalizations
- Drives Economic Support: Funds essential services and supports healthcare providers nationwide
Medicaid not only helps individuals—it also contributes to the overall health of communities and the sustainability of the healthcare system.
Final Thoughts
Understanding Medicaid is essential for anyone evaluating healthcare options for themselves or their family. While both Medicaid and Medicare serve important roles, Medicaid provides crucial support to low-income individuals and families of all ages, covering a broad range of medical services with minimal cost to beneficiaries.
If you’re unsure whether you or a loved one qualifies, consider speaking with a healthcare professional or attorney who can guide you through the eligibility and application process.
At Doane & Doane, our legal team in West Palm Beach, Florida, specializes in helping individuals understand and access Medicaid benefits, as well as plan for long-term care and financial security.
Visit our website or contact us today to schedule a consultation.
Let us help you protect your health and your future with confidence and clarity.
Lachlan Casimaty
Noemi Dent
