Medicare vs. Medicaid

Medicare and Medicaid are both publicly funded health insurance programs. They have different eligibility requirements, coverage, and costs. Magellan Healthcare can help you navigate the coverage and programs available under both systems.


Original Medicare has two parts: Medicare Part A and Part B. Part A covers inpatient care in a hospital or skilled nursing facility, along with hospice care, nursing home care, and home health care. Part B covers medically necessary and preventative care. Part B can cover outpatient care such as clinical research, ambulance services, durable medical equipment, mental health care, doctors visits, emergency room visits, and limited outpatient prescription drugs.

Medicaid has similar services to Medicare Part A and Part B, and also includes prescription drug coverage.


With Medicare, beneficiaries pay monthly premiums for Part A and Part B. They also pay coinsurance, copayments, and deductibles. Many people receive Part A with no premiums if they or their spouse have worked long enough while paying taxes to Social Security.

Medicaid has lower costs for its beneficiaries, though they still involve premiums, copayments, coinsurance, and deductibles. Beneficiaries pay only small copayments for prescription drugs.

Care Access

Medicare beneficiaries have coverage with any healthcare provider that accepts Medicare. 

Medicaid beneficiaries may have more difficulty finding healthcare providers that accept Medicaid as full payment for covered services.


Medicare is for Americans age 65 or older or those with disabilities. If you have received disability benefits from Social Security or the Railroad Retirement Board for 24 months, you will be automatically enrolled in Medicare. People with ALS automatically receive Medicare benefits the same month they begin receiving disability benefits. People with ESRD are eligible for Medicare coverage in the fourth month of a regular course of dialysis treatment.

Medicaid is intended to help people with low incomes and limited resources to afford their health coverage. Beneficiaries must meet income and resources requirements.

People may be eligible for both Medicare and Medicaid. These dual-eligible beneficiaries can take advantage of Special Needs Plans designed for their situation.


Medicare is primarily handled by the Social Security Administration. The Centers for Medicare and Medicaid Services (CMS) makes a lot of the administrative and policy decisions, updating the resources and producing helpful guides for these services such as the Medicare & You Handbook.

Medicare is funded by payroll taxes through Social Security. Money gets taken out of each American’s paycheck and this is pooled and distributed to current Medicare beneficiaries. The money taken out of your paycheck is not saved for you; rather, the workforce of the future will pay for your Medicare benefits.

Medicaid is jointly funded by the state and local governments. For that reason, states have the jurisdiction to choose which savings programs to offer beneficiaries.

We Make Getting Medicare Coverage Easy

Magellan Healthcare takes care of its customers. We will make sure you have the coverage you need at an affordable price. Call us today.