Medicare vs Medicaid: the difference, and what each pays for in care

Medicare is federal health insurance for people 65 and older and some younger people with disabilities. Medicaid is a joint federal and state program for people with low income, and it is the main payer for long-term care. For care at home or in a facility, the difference that matters most is this: Medicare does not pay for long-term custodial care, and Medicaid can.

Many families need both pages. Start with the table, then read the sections below for the care settings you are weighing.

Medicare and Medicaid side by side

	Medicare	Medicaid
Who runs it	The federal government	States, with federal rules and federal funding
Who qualifies	People 65 or older, and some younger people with a disability, End-Stage Renal Disease or ALS	Eligible low-income people. Rules differ in each state
Depends on income?	Not for basic eligibility. Premiums can rise with income	Yes, plus other rules set by your state
Skilled nursing facility	Short stays, up to 100 days per benefit period after a qualifying hospital stay	Covers nursing facility care for people who qualify, including beyond 100 days
Long-term custodial care	Not covered	Covered for people who qualify. Medicaid is the primary payer for long-term care
Home health care	Part-time skilled care when ordered by a doctor and you are homebound	Home and community-based services, which vary by state
Personal care at home	Not covered when it is the only care you need	Covered in many programs. Your state decides
24-hour care at home	Not covered	Depends on the state program
Assisted living	Not covered	Some services in some states. Room and board generally excluded
Hospice	Covered under Part A with conditions	Check your state program
Where to apply	Medicare.gov. Some people are enrolled automatically	Your State Medical Assistance (Medicaid) office

The table cites Medicare.gov and Medicaid.gov. Your state sets the details for Medicaid.

What Medicare pays for in care

Medicare covers medical care. In long-term care terms, that means part-time skilled home health, a limited stay in a skilled nursing facility and hospice. It does not cover custodial care, which is mostly non-medical help with bathing, dressing and using the bathroom. Medicare.gov also says Medigap does not cover long-term care in a nursing home or in the community.

Details are on our Medicare coverage page. To check whether home health fits, use the Medicare home health checker.

What Medicaid pays for in care

Medicaid.gov calls Medicaid the primary payer across the nation for long-term care services. Medicare.gov says it also covers some services Medicare does not, such as nursing home care and personal care. Who qualifies and what is covered differ by state. Medicare.gov says the eligibility rules are different in each state.

Details are on our Medicaid page, including home and community-based services, the look-back rule and spousal protections.

Having both: dual eligibles

Medicaid.gov says Medicaid can help people who also have Medicare with premiums and out-of-pocket costs through Medicare Savings Programs. Medicare pays first for Medicare-covered services, and Medicaid covers the rest up to the state's payment limit. Medicaid also covers services Medicare does not fully cover, such as nursing facility care beyond the 100-day limit, prescription drugs, eyeglasses and hearing aids.

For someone with full-benefit Medicaid, Medicare.gov says the state pays the Part B premium and may pay other cost-sharing. See Medicare Savings Programs.

Common mix-ups

• "Medicare will cover the nursing home." Medicare covers a short stay in a skilled nursing facility after a qualifying hospital stay of at least 3 days in a row, for up to 100 days per benefit period, and only while you need daily skilled care. Medicare.gov says Medicare does not pay for long-term care, and Medigap does not either.
• "Medicare covers a home health aide." Only alongside skilled care. Aide help is not covered when it is the only care you need.
• "Hospice covers the nursing home bill." Medicare does not cover room and board when hospice care is given at home or in a nursing home or hospice facility.
• "Medicaid is the same everywhere." Medicare.gov says the rules around who is eligible for Medicaid are different in each state.

Which one fits which care setting

• Skilled care at home after a hospital stay. Medicare may pay if the home health rules are met. See home health care.
• Daily help at home for the long term. Medicare does not pay. Medicaid programs, VA benefits, long-term care insurance and private pay are the usual routes. See home care and personal care.
• Nursing home. Medicare pays for a short skilled stay. Longer stays are paid for privately or by Medicaid. See nursing homes.
• Assisted living. Medicare does not pay. See assisted living and what Medicaid may cover.

Other routes are on the funding pages for VA benefits, long-term care insurance and private pay. To compare what different settings cost, use the care cost comparison.

Next step

Carevo does not decide which program you qualify for. Ask your doctor or the facility what Medicare will pay for, and ask your state Medicaid agency whether you may qualify. When you are ready to look at providers, tell us what you need.