Medicare and Medicaid are both government-run health coverage programs. But they differ in terms of eligibility, benefits, funding, and administration.

Medicare is funded and regulated by the federal government, while Medicaid is funded and regulated jointly by the federal government and the states.

Medicare covers Americans 65 and older or those who have a qualifying disability or ESRD. The main coverage benefits are standardized nationwide. Medicare Advantage plans can add on services, i.e., extra benefits, as long as they meet federal guidelines. Medicare is funded by payroll taxes, general revenue, and premiums that beneficiaries pay. There is no income limit for Medicare eligibility, although Medicare beneficiaries with very high incomes may pay higher premiums for Medicare Part B and Part D.

Medicaid, on the other hand, is geared toward people with low incomes and the medically needy. Medicaid programs are run by each state and funding is provided jointly by the state and federal governments. So states have some flexibility in terms of eligibility rules and the benefits that are provided. Some states limit coverage to children, pregnant women, very low-income parents, and people who are elderly, blind, or disabled. But the majority of the states have adopted Medicaid expansion as part of the Affordable Care Act, which means they also provide Medicaid coverage to low-income adults, even if they don’t have children.

Medicaid benefits also vary from state to state; there are federal minimum requirements, but states can choose to provide additional benefits.