I’m not sure who in the Federal Government came up with the names “Medicare” and “Medicaid.” But I kind of wish they had made them sound a little more different. Because so many people confuse them. Medicare and Medicaid are two very different programs serving different populations. Both programs can help with health care costs, but to different degrees. And both can support some forms of care at home when eligibility criteria are met, including home health services. So let’s quickly tease them apart, then dive in a little deeper into each. 

Medicare vs Medicaid: A simple side‑by‑side view

Here’s all of the above in an easy-to-read table.

Medicare in a nutshell

Medicare is a federal health insurance program for older adults age 65+, as well as some people under 65 with certain illnesses or disabilities. Any American citizen or permanent resident who meets these age, illness, or disability requirements is eligible for Medicare, regardless of their income or assets. Because it’s a federal program, Medicare rules are the same in every state. Medicare is funded through a mix of dedicated payroll taxes, general federal revenues, and premiums and cost-sharing paid by beneficiaries.

RELATED READING: Original Medicare vs. Medicare Advantage: Key Differences for Family Caregivers

Medicaid in a nutshell

Medicaid is a health insurance program run jointly by states and the federal government for people with limited income and assets. This can include children, adults, seniors, pregnant women, and people with disabilities who meet financial and clinical criteria. Medicaid is funded through federal, state, and local taxes.

Medicaid programs and rules can vary by state, but all must meet certain federal requirements. For this reason, our friend’s mom in one state might get a service through Medicaid that our parents in another state don’t. The differences in rules and benefits are often based on the amount of funding the state dedicates to its Medicaid program. 

Think of them as two different tools

If we imagine our loved one’s health coverage as a toolbox, Medicare and Medicaid are two separate tools we might use at different times.

• Medicare is the tool they can use when they turn 65 or have end‑stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS) or certain disabilities. It helps pay for hospital stays, doctor visits, lab tests, and short‑term skilled care. 
• Medicaid is the tool they can use if their income and assets drop below the limits set by their state’s Medicaid program. It helps pay for healthcare costs and can cover longer‑term support like nursing homes or in-home care, depending on their state. 

Dual Eligibility

Some people are able to use both tools together. These people are described as “dual eligible.” If the person we care for is eligible for Medicare (65+ or under 65 with ALS, ESRD, or certain disabilities) and also meets Medicaid income and asset criteria in their state, they can be covered by both Medicare and Medicaid. In this case, Medicare usually pays first, and Medicaid helps pay for what’s not covered and adds extra services when allowed. 

Depending on our loved one’s income, assets, and health condition, they may qualify for full Medicaid coverage, a Medicare Savings Program (MSP), or a Special Needs Plan.

Full Medicaid coverage means our loved one won’t pay any additional coinsurance for services that are covered by both Medicare and Medicaid. If the service is only covered by Medicare, they may need to pay co-insurance, depending on their state Medicaid program rules.

MSPs help people with limited income and resources pay for Medicare costs like premiums, deductibles, and copays. There are four main types of MSP (QMB, SLMB, QI, QDWI). Benefits vary by MSP type and state, and may include covering Part B premiums and granting automatic enrollment in the Part D "Extra Help" for prescriptions.

Special Needs Plans (D-SNPs) are Medicare Advantage plans designed for dual eligible individuals who have certain severe and chronic diseases (e.g., cancer or congestive heart failure). They tailor their benefits, provider choices, and list of covered drugs to meet the specific needs of the groups they serve. Many D-SNPs coordinate with Medicaid but don’t fully integrate all benefits under one contract. Others are “highly integrated” which means they tie together Medicare-covered services with Medicaid long‑term services, supports, and behavioral health.

RELATED READING: Four Strategies for Protecting Assets from Medicaid

What Medicare covers

Medicare coverage is offered in several parts. I like to think of them as “hospital,” “doctors,” and “extras.”

• Part A: Hospital insurance. Covers hospital stays, skilled nursing facility care, hospice, and some home health care.* 
• Part B: Medical insurance. Covers doctor visits, outpatient care, preventive services, some mental health, medical equipment, and some home health care.* 
• Part D: Prescription drug coverage. 
• Medigap (Medicare Supplement): Private Plans that people on Original Medicare can purchase to cover Original Medicare Parts A and B deductibles, coinsurance, and copays that the person we care for may incur. Medigap plans are not available to people on Part C, Medicare Advantage plans. 
• Part C (Medicare Advantage). Private plans that package Parts A and B, often with drug coverage and extra benefits not covered by Original Medicare, like routine dental and vision coverage.

*Let’s talk about “some home health care” for a minute. For eligible homebound patients, Medicare covered home health care includes medically necessary skilled care provided in the home by a skilled nurse, physical, occupational, or speech therapist, as well as home health aide and medical social worker services. 

Home health care is different from home care. Home care is not skilled medical care, but “custodial care” that can be provided by a personal care aide, e.g., help with housekeeping, errands, transportation, or activities of daily living. So here again, we have another instance of two things with very similar names (home health care/home care) providing very different support. And Medicare covers one (home health care) but not the other (home care). I just wanted to make this clear up front, so we’re all on the same page as to what home health care is.

What Medicaid covers

Medicaid has to cover a basic list of medical services in every state, including: 

• Inpatient hospital services (including room, board, and necessary hospital-based care)
• Outpatient hospital services (clinic visits, same-day surgeries, hospital-based diagnostics, etc.)
• Doctor services (office visits, specialty care, surgery performed by doctors)
• Laboratory and X‑ray services (basic diagnostic lab tests and imaging)
• Nursing facility services for those needing this level of care
• Home health care*
• See the full list of mandatory covered services here.

. Many states choose to go further and cover services like: 

• Prescription drugs
• Outpatient therapies (like physical or occupational therapy)
• Dental and vision care
• Transportation to medical appointments
• Personal care/home care*
• Home and Community Based Services (HCBS)
• There’s a full list of optional covered services here. Offerings vary by state.

If a Medicaid patient is eligible for hospice care, they’ll be transitioned to Medicare for that care, which is fully covered by Medicare.

*Notice that all state Medicaid programs cover home health care and some state Medicaid programs cover home care. Some may even pay family caregivers to provide home care services through a Home and Community Based Services program. 

Out of pocket costs for Medicare and Medicaid

Time to talk about money, because we absolutely need to understand this.

With Original Medicare, most people pay:

• No premium for Part A, if they or their spouse paid Medicare taxes for at least 10 years
• A monthly premium for Part B:  $202.90 in 2026
• Often a monthly premium for Part D, which varies by plan
• Deductibles 
  
  • Part A ($1,736 per benefit period in 2026)
  • Part B ($283/year in 2026)
  • Part D (varies by plan)

• Copays or coinsurance for many services after the deductible has been met

• If our loved one chooses a Medigap plan, they will pay a Medigap monthly premium, but not have to pay for deductibles, co-insurance, and/or copays, depending on the Medigap plan. Medigap plan premiums vary by state, plan, age of enrollee, and insurance carrier. 
• People with higher income/assets pay additional Income Related Monthly Adjustment Amount (IRMAA) for their Part B premium.
• People who don’t sign up for a Part D plan when they’re first eligible will pay a late enrollment penalty when they sign up for Part D.

With Medicare Advantage plans, costs vary by state and plan. Many MA plans: 

• Rebate the Medicare Part B premium
• Include Part D coverage at no additional premium
• Don’t have any deductibles 
• Co-insurance and copays vary depending on the plan

With Medicaid, costs are usually minimal at most:

• Many people have no premiums or deductibles
• Some may have small copays, depending on the state and income. 

If the person we care for has Medicare and Medicaid, Medicaid can often pay the Medicare Part A or B premiums and some or all of the deductibles and copays. 

More about home health care

I want to dive a little bit deeper into home health because this is where a lot of people leave money and support on the table.

If the person we care for is unable to leave home without help from another person or a medical device like a cane, walker, crutches, or wheelchair; and if they rarely leave home because of that; or their doctor has advised them against leaving home, they are considered homebound. 

If they’re homebound and have a health condition that increases their risk for hospitalization and requires skilled medical care, they may be eligible for covered home health care that can help them recover from an illness or injury. Home health care can also help manage a chronic condition like COPD, Parkinson’s, diabetes, stroke, or congestive heart failure, to name a few. All from the comfort of home. 

Since both Medicare and Medicaid cover home health care, this benefit is available to many adults who meet eligibility criteria. And that means millions of family caregivers could be getting a lot of support with the more complex care tasks we’re managing on our own. So it’s worth asking our loved one’s doctor if home health might be right for them.

Also, while home health is described as “short-term care,” it can continue as long as it’s considered medically necessary for our loved one. Their doctor just has to re-certify the home health care order after the first 90 days, then again every 30 days. Some people can receive home health care for years, or until they transition to hospice care near their end of life. 

RubyWell^TM offers a free service that can help predict eligibility for the Medicare home health benefit. If the person we care for looks eligible, RubyWell can then help guide us through the somewhat complicated process of getting a home health referral order accessing the covered care. It all starts with a short quiz. 

Getting the right coverage

Hopefully, this article has cleared up some confusion family caregivers may have had about Medicare and Medicaid. Now, what do we do with this knowledge?

First, if we think our loved one may be eligible for Medicaid or a Medicare Savings Program (MSP), we can learn about their state’s eligibility requirements and help them apply through their state Medicaid program’s website. It’s also smart to meet with an elder law attorney or certified Medicaid planner for help planning for and navigating the Medicaid application process. 

If it turns out that the older adult we care for doesn’t qualify for Medicaid or an MSP, then we need to get clear on the benefits available to them through their Original Medicare coverage (Parts A, B, and possibly D and a Medigap plan) or their Medicare Advantage (MA) plan. The good news is that there are a lot of benefits. And some, like the Medicare home health benefit, can ease some of our more clinical caregiving responsibilities and even provide family counseling, education, and referrals to local resources. 

To learn if the person you care for may be eligible for the Medicare home health benefit, take RubyWell's quiz.