Do You Know Difference Between Medicare and Medicaid?

The differences between Medicare and Medicaid are defined by the types of service each offers, the population each of these U.S. government programs serves, and the restrictions on who is eligible for each.

As the U.S. Department of Health and Human Services explains, Medicare is a national health insurance program, with premiums and co-payments, primarily for people 65 and older, whereas Medicaid is a joint state and federal assistance program that covers health care costs for low-income people.

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Medicare, generally speaking, doesn't care about your income as long as you're older than 65 or you're part of an under-65 cohort that qualifies for the taxpayer-funded health insurance because of disabilities or disease.

Medicaid, conversely, doesn't care what age you are or what conditions you have as long as you meet the limited-income requirements.

And it's not necessarily an either-or arrangement: Some people qualify for both Medicare and Medicaid simultaneously. These dual eligible citizens are insured primarily through Medicare, with Medicaid serving as the payer of last resort, and picking up most or all of the remaining costs for needed care, according to the Centers for Medicare and Medicaid Services.

States, which run the Medicaid programs and set the local eligibility requirements, can choose to charge premiums and co-payments as a cost-sharing measure with patients. But to receive federal matching funds, states must comply with federal rules that limit patients' out-of-pocket costs or, in many cases, forbid charging patients, according to Medicaid.gov.

The arrival of the Affordable Care Act (ACA), the national health care overhaul also dubbed Obamacare, has had an effect on both Medicare and Medicaid, but in different ways for each.

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Medicaid has been expanded under the ACA in those states that approve the expansion, and not all states have bought into the expansion since the U.S. Supreme Court made doing so optional.

Obamacare's effect on Medicare is the subject of ongoing debate. U.S. News & World Report concluded in 2014 that Medicare patients remain largely — but not entirely — unaffected by the ACA. Some wealthier beneficiaries are paying more for prescription drug coverage, but the "vast majority" of Medicare users have seen drug costs drop as the ACA filled in some gaps in the program's "Part D" coverage.

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