I see a lot of confusion about these programs, and I understand the confusion. The names are too similar and if you’re young and healthy and middle class, you don’t likely have a lot of experience with either program. So I thought I would give an incredibly simplified overview, just to orient people. There are a few exceptions to what I describe, but this covers the majority of cases. I’m sorry it’s long.
**Medicare: **
This is federal money, and administered by the federal government. This is the program that you pay for in your payroll taxes. Generally, to be eligible for Medicare you have to have paid into the system with your taxes. This means that usually you have to have worked for 10 years, not necessarily all in a row. You can be really rich and still get Medicare. You can also be really poor, so long as you worked.
Also to be eligible you generally have to be either 65+ or you have to be disabled. There are a few health conditions that will also qualify you, such as end-stage renal disease (kidney failure). If you qualify for Medicare via disability rather than age, you generally have to be collecting disability payments (SSDI) for 24 months before you will be able to have medical expenses paid via Medicare.
If you qualify for Medicare, you still have to pay for some things, including co-pays and generally having to pay a premium every month. Medicare operates a lot like a normal insurance program.
Medicaid:
Medicaid is a different program than Medicare. Medicaid is a program that is paid for by the federal government and the individual states. It is administered by the state. States are not required to have Medicaid at all, but if they decide to have Medicaid, they have to follow certain rules. States do have some flexibility about who can have Medicaid and how much those people can earn, but there are limits to the flexibility and some things are simply required.
Medicaid is only available to people who are poor and who do not have many assets. Some people have both Medicare and Medicaid. In some cases, Medicaid pays for the things that Medicare doesn’t, like Medicare premiums or years of nursing home care.
Before the Affordable Care Act (Obamacare), states offered Medicaid only to older people, people with disabilities, pregnant women, children, and parents of eligible children (I’m probably forgetting a category). The Affordable Care Act allowed states to extend Medicaid to cover poor adults between 18 and 65 who do not have disabilities.
Some states have chosen not to extend Medicaid coverage to non-elderly poor adults. In these states, a non-elderly adult with no disabilities and no children is not eligible for Medicaid, no matter how poor he or she is. In other states, he or she is eligible. This is a state by state choice.
If you are really poor and qualify for Medicaid, you will not have to pay anything for the coverage. If you make a little more money than that, you might have to pay something each month.
To recap:
Medicare: Federal. Older or disabled. Have to have paid in. Can be any income.
Medicaid: Federal/state. Children, parents of children, pregnant women, older, or disabled. In states with expanded Medicaid, can be any age. Do not have to have paid in. Must be poor.