Medicare vs. Medicaid in 2025: What’s the Difference?

Navigating health coverage can be confusing, especially when trying to understand the difference between Medicare and Medicaid. In 2025, these two federal programs serve over 140 million Americans combined, but they cater to different groups with distinct eligibility, benefits, and costs. The “One Big Beautiful Bill” (signed July 4, 2025) introduces $1 trillion in Medicaid cuts through 2034, potentially affecting access, while Medicare remains largely unchanged.

This blog breaks down Medicare vs. Medicaid, covering who qualifies, what’s covered, costs, and how to apply. Use the Medicaid Eligibility Calculator to check Medicaid eligibility or explore key differences below.

Overview: Medicare vs. Medicaid

Medicare and Medicaid are government-funded health insurance programs, but they serve different populations and purposes:

• Medicare: A federal program primarily for people 65+ or with certain disabilities, regardless of income. It’s funded through payroll taxes and premiums.
• Medicaid: A joint federal-state program for low-income individuals, families, children, pregnant women, seniors, and people with disabilities. States manage it with federal guidelines.

In 2025, Medicare covers 65 million people, while Medicaid serves 80 million, including 40 million children. The Medicare vs. Medicaid distinction hinges on eligibility, coverage, and funding, with some people qualifying for both (“dual eligibles”).

Key Differences Between Medicare and Medicaid

1. Eligibility

• Medicare:
  • Age: Primarily for people 65 and older.
  • Disability: Covers those under 65 with disabilities (after 24 months of Social Security Disability Insurance) or specific conditions like End-Stage Renal Disease (ESRD) or ALS.
  • Income: No income requirement; eligibility is based on age or disability.
  • Citizenship: U.S. citizens or legal residents (5+ years).
  • Enrollment: Automatic for Social Security recipients; others apply via SSA.gov.
• Medicaid:
  • Income-Based: Covers low-income individuals (up to 138% Federal Poverty Level, or $21,597/year for one in expansion states). Check limits at Income for Medicaid Eligibility.
  • Categories: Includes children, pregnant women, seniors, disabled, and adults (in 39 expansion states + D.C.).
  • Citizenship: U.S. citizens or qualified non-citizens (e.g., lawful permanent residents).
  • OBBBA Impact: Starting 2026–2027, work requirements (80 hours/month for adults 19–64) and immigrant restrictions may reduce Medicaid eligibility for 11.8 million.

2. Coverage

• Medicare:
  • Parts:
    • Part A: Hospital stays, skilled nursing (limited), hospice, some home health. Free for most (if worked 10+ years).
    • Part B: Doctor visits, outpatient care, preventive services (e.g., screenings). Requires premiums.
    • Part C (Medicare Advantage): Private plans combining A, B, often D, with extras like dental or vision.
    • Part D: Prescription drugs via private plans.
  • Limits: No long-term care (nursing homes), limited dental/vision/hearing (some Part C plans cover).
  • Nationwide: Uniform coverage across states.
• Medicaid:
  • Services: Doctor visits, hospital stays, preventive care, long-term care (nursing homes, HCBS), dental (varies), vision, and more. See Does Medicaid Cover Dental? for details.
  • State Variations: 39 states cover adult dental (15 extensive, 12 none); children get comprehensive care via EPSDT.
  • OBBBA Impact: $1 trillion cuts may reduce optional benefits (e.g., dental) in states like California.

3. Costs

• Medicare:
  • Premiums: Part A free (if 10+ years worked); Part B $185.20/month (standard, 2025); Part D varies ($30–$100/month). Higher earners pay more (IRMAA).
  • Deductibles: Part A $1,632/hospital stay; Part B $240/year.
  • Copays/Coinsurance: 20% for Part B services; Part D varies by plan.
  • Out-of-Pocket: No cap (unless on Part C); Medigap can cover gaps.
• Medicaid:
  • Premiums: Rare; some states (e.g., Indiana) charge $1–$20/month for adults 100–138% FPL. See Is Medicaid Free?.
  • Copays: $1–$8 for prescriptions or visits in some states (e.g., Florida). Children/pregnant women exempt.
  • OBBBA Costs: $35 copays for specialist visits start October 2028 for non-exempt adults.
  • Free for Most: Children, pregnant women, and low-income adults (below 138% FPL) typically pay nothing.

4. Funding and Administration

• Medicare: Fully federal, funded by payroll taxes (FICA), premiums, and general revenue. Administered by CMS; consistent nationwide.
• Medicaid: Federal-state partnership; states cover 30–50% of costs. Administered by state agencies (e.g., Medi-Cal in California), causing variations. OBBBA cuts ($1 trillion) may limit state budgets, reducing benefits.

5. Dual Eligibility

• About 12 million people qualify for both Medicare and Medicaid (“dual eligibles”), typically low-income seniors or disabled individuals. Medicaid covers Medicare premiums, copays, and extras like long-term care or dental. Check eligibility at Medicaid Eligibility Calculator.

State-Specific Examples (2025)

• California (Medi-Cal): Free Medicaid for most (138% FPL, $21,597 for one); covers dental, long-term care. Medicare is standard (Part B $185.20/month). OBBBA may add $35 specialist copays by 2028.
• Florida: No Medicaid expansion; limited to children, pregnant women, disabled ($235/month for parents). Medicare unchanged.
• New York: Extensive Medicaid (138% FPL) with dental; Medicare standard. Dual eligibles get premium support.

How to Apply for Medicare vs. Medicaid

• Medicare: Enroll via SSA.gov or 1-800-772-1213, typically during Initial Enrollment (age 65) or Special Enrollment (disability). Automatic for Social Security recipients.
• Medicaid: Apply through Healthcare.gov, state portals (e.g., BenefitsCal.com for California), or county offices (www.dhcs.ca.gov). Provide income, residency proof. Use Income for Medicaid Eligibility for limits.

Challenges and “Big Beautiful Bill” Impact

• Medicare: High premiums ($185.20/month for Part B) and no out-of-pocket cap burden some. Limited dental/vision coverage.
• Medicaid: Provider shortages (70% accept Medicaid) and OBBBA’s $1 trillion cuts, work requirements (80 hours/month, 2027), and 6-month eligibility checks (2026) may reduce access for 11.8 million. California faces $705 million in SNAP-related costs, potentially cutting optional benefits like dental.

Frequently Asked Questions (FAQs)

What’s the difference between Medicare and Medicaid?

Medicare is for 65+ or disabled, regardless of income, with premiums ($185.20/month for Part B). Medicaid is for low-income groups, often free, but varies by state.

Who qualifies for Medicare vs. Medicaid?

Medicare: 65+ or disabled (no income test). Medicaid: Low-income adults (138% FPL), children, pregnant women, seniors, disabled.

Does Medicare or Medicaid cover dental?

Medicare: Limited (some Part C plans). Medicaid: Full for children; varies for adults (39 states offer some).

Can you have both Medicare and Medicaid?

Yes, “dual eligibles” (12 million) get Medicare for primary care and Medicaid for premiums, copays, or long-term care.

How do costs compare for Medicare vs. Medicaid?

Medicare: $185.20/month (Part B), $240 deductible, 20% coinsurance. Medicaid: Often free; some states charge $1–$8 copays. OBBBA adds $35 Medicaid specialist copays in 2028.

Conclusion

The difference between Medicare and Medicaid lies in their purpose: Medicare serves seniors and disabled individuals with premiums and copays, while Medicaid provides often-free coverage for low-income groups, with state-specific benefits like dental. The “One Big Beautiful Bill” threatens Medicaid access with $1 trillion in cuts, potentially adding $35 copays by 2028.

Check Medicaid eligibility with the Medicaid Eligibility Calculator or review Income for Medicaid Eligibility. For dental details, see Does Medicaid Cover Dental?. Contact your state Medicaid office (e.g., www.dhcs.ca.gov for California) or SSA.gov for Medicare applications.