The Main Difference Between Medicare and Medicaid

Medicare and Medicaid. These are two American programs that you have probably heard of, but if you have never needed either one of them, it is easy for you to mix these up. 

This is especially true when you factor in that 12 million people are dually eligible for both programs. On top of this, more than 15% of all people enrolled in Medicaid are eligible for both programs. 

So, with this in mind, how do you figure out what you need? What is Medicare? What is Medicaid? 

This is the difference between Medicare and Medicaid. 


To put it simply, Medicare is a program specifically for seniors aged 65 or older or people with a particular disability. Income level does not play into if you are eligible for this program like it can for Medicaid. 

For certain parts of Medicare, you have to have worked for 10 years while paying taxes into it along with meeting the age or disability requirements. Medicare can cover certain things for seniors like hospitalization, doctor’s visits, wheelchairs, canes, x-rays, and more. 

About 1.45% of your taxes as a W-2 employee go towards the Medicare program. If you are a business owner or are self-employed, then that number doubles to 2.9%. 

How much does it cost? This Medicare chart can give you an accurate picture as of 2021. If you paid Medicare taxes for more than 30 quarters, the premium for hospitalization coverage is $259 per month. 

The standard for Part B is $148.50 and the rest varies depending on what exactly your plan is. 

This program’s main goal is to make healthcare access easier and more available for people that are either 65 or older or have a disability. You can find medicare leads in the link. 


Now, the main difference with Medicaid compared to Medicare above is that this program is not based on age or disability but rather based more on income level. In other words, it is designed to give those struggling to get by access to basic healthcare and medical supplies when they otherwise might not be able to afford it on their own. 

What are the exact eligibility requirements? As stated above, it depends on income level, but that varies not only by state but also by how many people are in your family. 

Let’s use New Jersey and New Hampshire as an example. As of 2021, New Jersey allows any adult that makes up to 138% of the national poverty line to be eligible for the program. New Hampshire is slightly different, going up to 133% of the poverty line. 

But, both states expand that poverty line for people in families. So, if you have a family of four, that limit gets pushed up to 318% of the poverty line in New Hampshire and 355% of the poverty line in New Jersey. 

In other words, the more people under 18 or have a disability in your household, the better chances of your household being eligible based on finances.

Learn More About the Difference Between Medicare and Medicaid 

This is just a brief overview of the difference between Medicare and Medicaid. Just keep in mind that the former is based on age and the latter income. 

Do you want to know more? Then, read our articles in the Medical section. 

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