Medicaid vs Medicare: What's the Difference?

Medicare: The Basics

Medicare is a federal health insurance program primarily for people 65 and older. However, people with disabilities can qualify for Medicare earlier if they've received Social Security Disability Insurance (SSDI) for 24 months, or immediately if they have End-Stage Renal Disease (ESRD) or ALS (Lou Gehrig's disease).

The Four Parts of Medicare

• Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. Most people don't pay a premium for Part A.
• Part B (Medical Insurance): Covers doctor visits, outpatient care, preventive services, and durable medical equipment. Part B has a monthly premium ($185/month in 2026 for most people) and usually covers 80% of approved costs.
• Part C (Medicare Advantage): Private insurance plans that combine Part A and Part B coverage, often with additional benefits like vision, dental, and prescription drugs.
• Part D (Prescription Drug Coverage): Covers prescription medications through private insurance plans.

Medicare Eligibility for People with Disabilities

If you receive SSDI, you become eligible for Medicare after a 24-month waiting period from the date your SSDI benefits begin. (Note: the wait counts from your SSDI entitlement date, which may be retroactive.)

Exceptions to the waiting period: ALS (Lou Gehrig's disease)—Medicare begins the same month SSDI begins; End-Stage Renal Disease—Medicare begins after a shorter waiting period.

What Medicare Doesn't Cover

Medicare has significant gaps, especially for people with disabilities:

• Long-term care (nursing home stays beyond short-term rehabilitation)
• Most dental care
• Most vision care (routine exams and glasses)
• Hearing aids
• Personal care assistance at home
• Most home modifications

This is why many people with disabilities also need Medicaid.

Medicaid: The Basics

Medicaid is a joint federal-state program that provides health coverage based on financial need. Unlike Medicare, Medicaid is administered by individual states, so eligibility rules, covered services, and program names vary significantly.

Who Qualifies for Medicaid?

• SSI recipients: In most states, receiving SSI automatically qualifies you for Medicaid. In a few states ("209(b) states"), you must apply separately.
• Low-income adults: The ACA allowed states to expand Medicaid to adults earning up to 138% of the federal poverty level. Most states have adopted this expansion.
• Medically needy: Some states cover people with high medical expenses whose income would otherwise be too high.
• HCBS waiver programs: Often have more generous financial eligibility rules, sometimes up to 300% of the SSI federal benefit rate.

What Medicaid Covers

Medicaid typically provides more comprehensive coverage than Medicare, including:

• Doctor visits and hospital care
• Prescription drugs
• Long-term care (nursing home and home-based)
• Personal care assistance
• Dental care (varies by state)
• Vision care (varies by state)
• Mental health services
• Transportation to medical appointments
• Home and community-based services (through waivers)

Medicaid and Asset Limits

Unlike Medicare, Medicaid considers your assets when determining eligibility. For SSI recipients, the $2,000 resource limit that applies to SSI also applies to Medicaid in most cases. Some Medicaid programs (particularly waiver programs) have higher or no asset limits.

Dual Eligibility: Having Both Medicare and Medicaid

Many people with disabilities qualify for both Medicare and Medicaid—a status called "dual eligibility." Approximately 12 million Americans are "dual eligibles."

How Dual Coverage Works

• Medicare pays first for services both programs cover (hospital stays, doctor visits, etc.)
• Medicaid pays second and may cover Medicare's deductibles, copays, and premiums
• Medicaid covers services Medicare doesn't (long-term care, dental, vision, personal care)

Medicare Savings Programs (MSPs)

If you have Medicare but limited income, you may qualify for a Medicare Savings Program through your state Medicaid office:

• Qualified Medicare Beneficiary (QMB): Pays Part A and B premiums, deductibles, coinsurance, and copayments. Income limit: 100% of federal poverty level.
• Specified Low-Income Medicare Beneficiary (SLMB): Pays Part B premiums only. Income limit: 120% of federal poverty level.
• Qualifying Individual (QI): Pays Part B premiums only. Income limit: 135% of federal poverty level.
• Qualified Disabled and Working Individuals (QDWI): Pays Part A premiums for certain people with disabilities who lost premium-free Part A when they returned to work.

Extra Help (Low-Income Subsidy)

If you have Medicare and limited income, you may also qualify for "Extra Help" paying Part D prescription drug costs. Extra Help can save $5,000+ per year on medications.

Key Differences at a Glance

How This Affects SSI vs. SSDI Recipients

• SSI recipients typically receive Medicaid immediately (in most states) but don't have Medicare unless they also have SSDI or turn 65.
• SSDI recipients receive Medicare after 24 months but may or may not qualify for Medicaid depending on their income and state rules.
• Concurrent beneficiaries (receiving both SSI and SSDI) typically have both Medicaid and Medicare—the most comprehensive coverage combination.

FAQs

Understanding Your Coverage with Purple

Navigating Medicare, Medicaid, and disability benefits requires keeping track of many moving pieces. Purple helps SSI and SSDI recipients manage their finances while staying compliant with program rules, so you can focus on your health and wellbeing rather than worrying about losing coverage.

Official Resources

• Medicare Overview
• Medicaid Overview
• Dual Eligibility Programs