Medicare vs. Medicaid: What’s the Difference?

Medicare vs. Medicaid vs. Private Insurance: What's the Difference?

Having health insurance is important at every age, but your options can change when you reach 65 or your financial situation shifts. For example, you may become eligible for government programs like Medicare and Medicaid. Even if you qualify for these programs, you can still opt for private insurance. Understanding Medicare vs. Medicaid, Medicare vs. private insurance and how these programs compare can help you choose the right coverage for your needs. Read on to learn the differences between these health insurance options and how a supplemental policy from Aflac can fill gaps in your coverage.

4 min. read

Table of Contents

Key Takeaways

Medicare is a federal health insurance program for people age 65 and older and individuals with certain disabilities,¹ while Medicaid is a joint state and federal program for lower-income individuals.²
Seniors can also get private insurance through an employer-sponsored plan or an individual marketplace plan.
Aflac offers supplemental health insurance plans that can help pay for expenses your primary plan may not fully cover.

What is Medicare?

Medicare is a federal health insurance program for people who are 65 or older and some younger people with qualifying disabilities or health conditions.¹ Medicare has national standards for costs and coverage, regardless of where you live.³ Many people enroll in Medicare after they retire or lose their employer-sponsored health insurance.

What is Medicaid?

Medicaid is a joint federal and state health insurance program that helps cover medical costs for people with limited income. Medicaid offers some benefits that Medicare doesn’t normally cover, like nursing home care.⁴ Each state runs its own Medicaid program, so eligibility rules and benefits can vary from state to state.²

What’s the difference between Medicare vs. Medicaid?

While Medicare and Medicaid are both government health care programs, they have several differences:

Government level: Medicare is a federally run program, while Medicaid is primarily run by individual states (although the federal government sets Medicaid’s minimum rules).^1,2
Qualification requirements: Medicare is primarily age dependent, as you must be 65 or older unless you have a qualifying condition or disability. In contrast, Medicaid is income-dependent, with asset and income requirements varying by state.^1,2
Coverage: Medicare and Medicaid don't cover the same expenses, so it's important to read the fine print of any plan before enrolling. For instance, Medicaid is more likely to cover nursing homes or personal care services.⁴

Can you use Medicare and Medicaid at the same time?

Yes. Some people may qualify for both Medicare and Medicaid. This is called being dual eligible.⁵

If you’re dual eligible, Medicare usually pays first for your Medicare-covered services. After that, Medicaid may help pay some remaining costs, such as certain deductibles, copays or coinsurance.⁵ Having both types of coverage can help reduce out-of-pocket costs and provide broader support.

What is private insurance?

Private health insurance is offered by an insurance company. Many people get private insurance through an employer, but you can also buy a plan through the Health Insurance Marketplace or directly from an insurer.

Private insurance plans vary widely. Costs, provider networks, deductibles and covered services depend on the plan you choose.

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Medicare and Medicaid vs. private health insurance: Which plan is right for you?

The main difference between these three plans is that Medicare and Medicaid are public, while private insurance is not. If you’re comparing coverage options after age 65, understanding these differences can help you find the best health insurance for seniors based on your care needs, budget and eligibility.

These three types of plans differ in terms of their:

Flexibility: Medicare allows you to go to any doctor that accepts the national program — and many doctors do. You may have even more options with private health insurance, but it depends on the plan. Medicaid tends to have the least flexibility.
Coverage: Each plan covers different services and may have different restrictions. There are also several types of private health insurance plans, so you'll have to be selective when comparing.
Cost: Medicaid is often the lowest-cost option for those who qualify. Medicare may be more affordable than private insurance for many seniors, though private insurance costs depend on premiums, deductibles and out-of-pocket limits.
Eligibility: Medicare eligibility depends mainly on your age or disability, while Medicaid eligibility depends on your income and state rules. Private insurance is generally available to anyone through employers, marketplaces or private insurers.

Supplemental insurance can complement your primary plan

Medicare, Medicaid and private insurance can all help reduce your out-of-pocket costs, but each plan may still leave coverage gaps. For instance, you may still owe deductibles, copays, coinsurance or expenses for services your primary plan doesn’t fully cover.

That’s where supplemental insurance can be beneficial. Aflac’s supplemental plans work alongside your existing coverage to help cover costs your primary plan doesn’t. We offer a wide range of supplemental policies, including cancer, hospital, critical illness and short-term disability insurance.

Chat with an agent today to learn how our insurance plans can fit your budget and get a quote.

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