Medicare & Medicaid

Learn how to make the most of complicated government programs.

  • Medicare and Medicaid are different and separate programs. Medicare is a federal health insurance program primarily for older adults. Medicaid is an assistance program for people with low incomes.
  • Medicare doesn’t cover most long term care expenses, but learning how to maximize its benefits is an essential step toward meeting the costs of aging.
  • In most states, Medicaid covers nursing home costs and provides some assistance to qualified caregivers. Even if your loved one is financially comfortable today, it’s a good idea to learn about Medicaid.

Next Step

The basic Medicare coverage most recipients get, often called Original Medicare, consists of Part A hospital insurance and Part B medical insurance.

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Medicare is federal health insurance for people who are age 65 or older, as well as younger people with certain disabilities and illnesses. Understanding Medicare basics isn’t as difficult as it first appears, but the program does have several different elements that require explanation.

When they turn 65, most Americans automatically start receiving what is known as Original Medicare, which consists of Medicare Part A and Part B. Original Medicare usually covers 80 percent of the approved amount charged by a physician or facility.

Your Loved One’s Current Coverage

To find out what Medicare coverage your loved one has now, call 1-800-MEDICARE with your loved one on the line. If your loved one can’t join you, call the same number to request a form authorizing you to speak on his or her behalf.

Medicare Part A, which is free for most recipients, helps pay for inpatient hospital care, skilled nursing facility care after a hospital stay, hospice care, and some home healthcare. Part B, which usually requires a monthly premium, helps pay for doctor’s services, outpatient hospital care, and some other medically necessary services. Part B is optional; your loved one may not need it if he or she already receives benefits from an employer or union.

To help pay for prescription drugs, anyone who qualifies for Medicare can choose a Medicare Prescription Drug Coverage plan (also known as Medicare Part D). Provided by private companies, these plans can charge different premiums, cover different drugs, and offer different benefits as long as the overall value matches Medicare’s standard benefit. For people with low incomes, several other programs can help pay for prescription drugs.

To pay for costs that aren’t covered by Medicare, people can choose from a variety of plans offered by private insurance companies. These plans fall into two categories: Medigap and Medicare Advantage.


Medicaid is a government assistance program that serves financially needy people regardless of age. Benefits vary by state, but at minimum, Medicaid covers the same services as Medicare.

Many caregivers ignore Medicaid, assuming that their loved ones will never meet the financial eligibility requirements. That’s often a mistake—the cost of long term care can quickly drain even a substantial savings account, making Medicaid a necessity.

To qualify for Medicaid, a person must not exceed strict limits on income and assets. The exact limit varies by state, but as a rough guide, the maximum monthly income is about $300 to $500, and total assets are limited to about $2,000 (not including a home, car, or personal possessions). Check with your state’s Medicaid program office for details and to learn how gift-giving and other factors can affect eligibility. Use our Find a Government Agency tool in the upper-right corner of this page.

Next step: The basic Medicare coverage most recipients get consists of Part A hospital insurance and Part B medical insurance. Learn More

Find a Government Agency

  • Select a state to view agencies that may assist with caregiving and eldercare issues.