Medicare and Medicaid are two separate but related government-funded health insurance programs. They were established in 1965 to provide health insurance coverage for individuals who can’t afford to pay for it out of pocket. Over the ensuing six decades, both programs have expanded, but they remain distinct programs supporting different populations.
Today, there are more than 76 million people (more than 7 million of whom are children) enrolled in Medicaid, while slightly fewer (about 69.7 million) are enrolled in Medicare.
This means these public health insurance programs cover more Americans than any private insurance option does.
Understanding the differences between Medicare and Medicaid can help clarify who qualifies for each program and what they cover. Some individuals may also be eligible for both programs if certain criteria are met.
[Understanding Medicare Eligibility for Individuals Under 65 With Disabilities]
At a Glance: Medicare vs. Medicaid 2026
Here’s how Medicare and Medicaid compare to one another in 2026.
| Feature | Original Medicare (Parts A and B) | Medicaid |
| Eligibility |
— Adults aged 65 and older — Individuals with qualifying disabilities, including end-stage renal failure and ALS |
Eligibility varies by state and is generally determined by:
— Income — Disability status — Dependent status — Pregnancy |
| Funding | Funded by the federal government | Funded jointly by federal and state governments |
| Primary coverage | Primary coverage source for dual-eligibles. Covers:
— Inpatient hospital care — Short-term care following hospitalization — Emergency and diagnostic services — Hospice care — Limited home health care services — Outpatient physician services — Preventive screenings, vaccines and wellness visits — Some durable medical equipment |
Secondary payer for dual-eligibles. Covers:
— Inpatient hospital care — Short-term care following hospitalization — Hospice care — Outpatient physician services — Preventive screenings, vaccinations and wellness exams — Durable medical equipment — Emergency and diagnostic services — Maternity and newborn care — Children’s health — Long-term care in a nursing facility — Some home health services — Some state plans also cover prescription drugs, dental care, vision services, physical therapy and hearing aids |
| Out-of-pocket costs |
— $1,736 deductible for Part A (hospital services) in 2026 — Coinsurance for inpatient stays ranging from $0 to $868 in 2026, depending on length of stay; full cost for days 150 and beyond — Standard $202.90 monthly premium for Part B (outpatient medical services) in 2026 — Skilled nursing facility stay coinsurance of $0 to $217 per day, depending on length of stay; full cost for days 101 and beyond — Part D (prescription drug coverage) maximum $615 annual deductible — 25% coinsurance cost until you reach $2,100 out-of-pocket Part D spending limit |
Varies by state and service, but typically nominal amounts charged as:
— Limited premiums — Enrollment fees — Copayments — Coinsurance — Deductibles — Other similar charges Out-of-pocket costs cannot be imposed on: — Emergency services — Family planning services — Pregnancy services — Preventive services for children |
| Long-term care | Doesn’t usually provide coverage for nursing home care | Covers care received in a nursing home |
Medicare vs. Medicaid: Who Pays and Who Qualifies?
Both Medicare and Medicaid offer health care coverage, but they do so in different ways and they’re designed for different populations.
— Medicare is a health insurance program administered by the federal government that provides coverage for people age 65 or older and younger people with specific disabilities, including ALS or end-stage renal disease, regardless of the person’s income.
— Medicaid is a state-administered assistance program that is distributed in accordance with federal guidelines. The joint state-federal program provides health insurance coverage to those with incomes below a specific threshold, regardless of age.
Medicare Eligibility and Coverage
Eligibility for Medicare is generally determined by age — adults 65 and older are encouraged to enroll in the program. In fact, you might be penalized for not signing up for the program in a timely manner.
Because it’s administered by the federal government, original Medicare (Parts A and B for hospital and outpatient services) provides the same coverage regardless of an individual’s home state. Medicare is overseen by the Centers for Medicare & Medicaid Services, an agency of the federal government.
[READ: What Is Medicare Part A?]
Medicaid Eligibility and Coverage
Medicaid, on the other hand, is a joint federal and state program that provides health insurance for people with limited income and resources. States are given the flexibility to administer the program within federal guidelines, so coverage rules and costs can vary from one state to another.
Medicaid primarily serves:
— Low-income individuals and families
— Children
— Disabled individuals, specifically older adults and younger people who receive Supplemental Security Income
Generally, individuals with income levels at or below 138% of the federal poverty level qualify for Medicaid. In 2026, this means that individuals who make less than $22,025 per year will qualify in most states, though Alaska and Hawaii have different qualifying thresholds. Some states apply different criteria to determine eligibility, such as whether the individual has children, is pregnant or has a disability.
What does Medicaid cover?
Coverage can vary by state, but Medicaid generally covers:
— Inpatient care
— Outpatient care
— Nursing home and assisted living care
— Transportation to health care services
— Labs and X-ray services
These services can help people live better and longer despite being unable to afford medical care or having certain conditions, notes Martha Santana-Chin, CEO of L.A. Care Health Plan, the largest publicly operated health plan in the nation.
“Medicaid is one of the most cost-efficient forms of coverage, especially when compared to private insurance. Medicaid has lower administrative costs, lower out-of-pocket expenses for beneficiaries and slower cost growth per beneficiary,” explains Santana-Chin.
According to CMS, patients with Medicaid usually pay none of the costs for covered medical expenses, or they may owe a small copayment. Since the enactment of the Affordable Care Act, states have been permitted to expand their Medicaid programs to cover all individuals with household incomes below a certain level. Some states have done so, while others have not. Whether you qualify for Medicaid coverage depends partly on whether your state has expanded its program.
Beyond providing coverage, Medicaid also serves as a major funding source for safety net hospitals and other providers serving vulnerable populations, Santana-Chin adds.
Can I Have Both Medicare and Medicaid?
The short answer: Yes.
Approximately 20% of Medicare beneficiaries are eligible for both Medicare and Medicaid. These individuals are referred to as “dual eligibles,” and they qualify for benefits from both programs and lower out-of-pocket costs.
Some of the plans, called Dual Eligible Special Needs Plans, or D-SNPs, “provide specialized care and wrap-around services for beneficiaries eligible for both Medicare and Medicaid,” Santana-Chin says.
Dual-eligible individuals tend to be low-income seniors or people with disabilities, Santana-Chin notes.
These programs can be especially helpful for certain low-income individuals, such as those with chronic conditions or disabilities. “Being enrolled in both Medicare and Medicaid can lower your out-of-pocket costs substantially for those who qualify,” says Whitney Stidom, vice president of sales enablement with eHealth Inc., a health insurance broker and online resource provider headquartered in Austin.
In cases of dual-eligibility, Diane Omdahl, Wisconsin-based president and founder of 65 Incorporated, a Medicare consulting firm, notes that Medicare acts as your primary insurer. If you also qualify for Medicaid, it will be your secondary payer.
“(Medicaid) works like a supplement plan, picking up the costs that Medicare Parts A and B don’t cover,” she explains.
However, Omdahl recommends consulting with a representative from your State Health Insurance Assistance Program, known as SHIP, to ensure you’re getting the benefits you qualify for.
The “Dual Eligible” Tiers Table
Some dual-eligible beneficiaries may qualify for assistance to pay Medicare premiums through a Medicare Savings Program. These plans aim to help low-income individuals save money on the out-of-pocket expenses associated with Medicare. Each program has a different income and resource eligibility limit. Here’s how they compare to one another.
2026 Medicare Savings Program income and resource limits
| MSP type | Who’s it for? | What does it do? | Monthly federal income limits | Federal asset limits |
| Qualified Medicare Beneficiary (QMB) | People whose income is less than 100% of the FPL | Covers Medicare premiums, deductibles, copayments and/or coinsurance | $1,350 individual or $1,824 married couple (Alaska and Hawaii limits are higher) | $9,950 individual or $14,910 married couple |
| Specified Low-Income Medicare Beneficiary (SLMB) | Older adults and adults with disabilities who have income between 100 and 120% of the FPL; must have original Medicare (parts A and B) to qualify | Covers Medicare Part B premium ($202.90 in 2026) | $1,616 individual or $2,184 married couple (Alaska and Hawaii limits are higher) | $9,950 individual or $14,910 married couple |
| Qualifying Individual (QI) | Limited program for people with income between 120% and 135% of FPL who also meet resource requirements; must have original Medicare (parts A and B) to qualify | Covers Medicare Part B premiums ($202.90 in 2026) | $1,816 individual or $2,455 married couple (Alaska and Hawaii income limits are higher) | $9,950 individual or $14,910 married couple |
| Qualified Disabled and Working Individual (QDWI) | Adults under age 65 with disabilities but have recently returned to work and lost their eligibility for premium-free Part A; income must be below 200% of the FPL | Covers Medicare Part A premium | $5,405 individual or $7,299 married couple (Alaska and Hawaii income limits are higher) | $4,000 individual or $6,000 married couple |
If you’re enrolled in an MSP, you automatically qualify to receive the Medicare Part D Low Income Subsidy Extra Help program, which helps pay for prescription drugs.
Medicaid Income Limits 2026
Each year, HHS sets a national federal poverty level that’s used to determine eligibility for certain programs and benefits, including Medicaid and the Children’s Health Insurance Program — a joint state and federal health insurance program available in some states that provides coverage for children and pregnant women who may earn too much to qualify for Medicaid. In 2026, people who fall under 138% of the FPL typically qualify for Medicaid.
| Family/household size | FPL 2026 annual income | 138% FPL in 2026 |
| Individual | $15,960 | $22,025 |
| Family of 2 | $21,640 | $29,863 |
| Family of 3 | $27,320 | $37,702 |
| Family of 4 | $33,000 | $45,540 |
| Family of 5 | $38,680 | $53,378 |
| Family of 6 | $44,360 | $61,217 |
| Family of 7 | $50,040 | $69,055 |
| Family of 8 | $55,720 | $76,894 |
What’s New for 2026: The Push for “Integrated Care”
The CMS Final Rule for 2026 includes some big changes to dual-eligible coverage and systems. The push is to streamline services for the nearly 13 million people who are dually eligible for both Medicare and Medicaid as “integrated care” that’s simpler to manage for both patients and providers.
— A shift to D-SNPs that combine Medicare and Medicaid benefits into a single plan with one card and one care team that will phase out D-SNP look-alikes
— New enrollment and access opportunities, including a monthly special enrollment period for people with full Medicaid benefits to switch into an integrated D-SNP
— Simplified, coordinated enrollment to streamline how beneficiaries choose and enroll in plans across both Medicare and Medicaid
— Increased care coordination and technology solutions to support that integration, including unified appeals and grievance systems to streamline navigating coverage disputes
— Increased focus on whole-person care, including behavioral health integration
— Changes to supplemental benefits eligibility
— A $2,100 out-of-pocket maximum for Part D
One card, one plan
A key element of the changes for 2026 has been the shift to D-SNPs, that combine Medicare and Medicaid benefits. Before, some dual-eligible individuals would have to juggle two cards, two plans and two separate care teams. This made for a disjointed health care experience that could be confusing and lead to care delays.
But the move toward more fully integrated networks means that by January 1, 2027, many of these individuals will have a single plan with one card and one care team. D-SNPs will be required to issue a single member identification card that works for both Medicare and Medicaid.
Plans will also be required to conduct an integrated health risk assessment for Medicare and Medicaid. This replaces the two separate assessments that were required previously, which reduces paperwork and redundancy while ensuring that the beneficiaries’ needs are addressed properly across both programs.
To be in compliance, HRAs must be completed within 90 days of enrollment and renewed annually, within 365 days of the previous assessments. Individual care plans must be completed within 30 days of the initial HRA or 30 days after enrollment, whichever comes later.
Medicaid and Medicare Coverage Challenges Ahead
Recent federal legislative efforts have altered the landscape for both Medicare and Medicaid, which could impact individuals enrolled in Medicare, Medicaid or both programs in the coming years.
“Medicaid is due for a shake-up following passage of the Big Beautiful Bill,” Stidom notes, referring to the One Big Beautiful Bill Act signed into law in July 2025.
“Fewer federal dollars will be going to the states for Medicaid support, and it may be harder for some people to qualify for Medicaid under new rules,” she explains. “As a result, millions of Medicaid beneficiaries could potentially lose their coverage.”
These changes may impact dual-eligible individuals and also lead to higher out-of-pocket costs under Medicare, she adds.
What’s more, some Medicaid beneficiaries who are not enrolled in Medicare could also lose their coverage, Stidom points out, but there may be another option — you may be able to access other coverage options under the Affordable Care Act.
For example, if you earn no more than 400% of the federal poverty level ($63,840 in 2026 for an individual), you may qualify for subsidy assistance that makes health insurance premiums much more affordable when buying coverage on your state’s health insurance marketplace.
You’ll have an opportunity to change your plan selections for 2027 beginning on October 15 when the annual open enrollment period opens. This period runs through December 7. You should also watch for communications from your current plan to understand how your coverage may change next year.
A licensed health insurance agent can help you review options from multiple insurers to find the best match for your needs and budget, as this can result in significant savings depending on your situation.
