What Is the Difference Between Medicare and Medicaid?

Many people use the terms Medicare and Medicaid interchangeably—after all, they both deal with health care. However, these programs serve very different purposes, with distinct eligibility requirements, coverage options, and roles in long-term care planning.

At McNickle & Bonner, LLP, our elder law attorneys help clients understand how these programs work together, and how proper Medicaid planning can protect assets while ensuring access to quality care.

Medicare: Health Insurance for Seniors and Certain Individuals

Medicare is a federal health insurance program designed primarily for:

• Individuals aged 65 and older

• Certain younger people with qualifying disabilities

• Individuals diagnosed with End-Stage Renal Disease or ALS

Eligibility is based on age or medical condition—not financial need.

The Four Parts of Medicare

• Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care (for limited timeframes), hospice, and some home health services.

• Part B (Medical Insurance): Covers doctor visits, preventive care, and outpatient services.

• Part C (Medicare Advantage): Private insurance plans combining Parts A and B, often including prescription coverage.

• Part D (Prescription Drug Coverage): Helps pay for medication costs.

Important Limitation:

Medicare provides only short-term coverage for skilled nursing or rehabilitation. It does not cover long-term custodial care—such as daily assistance with bathing, dressing, or eating—once medical treatment is no longer required.

Medicaid: Need-Based Health and Long-Term Care Coverage

Medicaid is a joint federal and state program providing medical and long-term care benefits to individuals and families with limited income and assets.

In Pennsylvania, Medicaid is known as Medical Assistance, and it plays a critical role in paying for long-term nursing home care, assisted living, and in-home support for seniors.

What Medicaid Covers

• Doctor visits, hospital services, and prescription drugs

• Nursing home and assisted living care

• In-home personal care and community-based services

• Certain medical services not covered by Medicare

Because Medicaid can cover expensive long-term care, it’s a cornerstone of elder law and asset protection planning at McNickle & Bonner, LLP.

Key Differences Between Medicare and Medicaid

FeatureMedicareMedicaidEligibilityAge or disability basedIncome and asset basedAdministered byFederal governmentFederal-state partnershipLong-term care coverageLimitedComprehensive for those who qualifyPurposeHealth insurance for seniorsHealth and long-term care assistance for low-income individualsRole in elder lawSupplementalCentral to asset protection and long-term care planning

Why the Difference Matters in Elder Law Planning

1. Long-Term Care Costs

2. Medicare may cover a short rehabilitation stay, but not ongoing care. Medicaid is often the only program that will pay for extended nursing home or in-home personal care.

3. Asset and Income Limits

4. Medicaid eligibility is means-tested. The team at McNickle & Bonner, LLP helps clients legally restructure assets—through trusts, transfers, and spend-down strategies—to qualify for coverage without losing everything.

5. The Five-Year Look-Back Rule

6. Medicaid reviews all asset transfers made within the previous five years. Improper transfers can delay eligibility. Planning early with an elder law attorney helps avoid penalties.

7. Estate Recovery

8. After a Medicaid recipient’s passing, the state may seek to recover care costs from their estate. Proper planning can minimize or prevent these claims.

9. Dual Eligibility

10. Some individuals qualify for both programs—Medicare covering medical care, and Medicaid handling long-term care and additional costs.

How McNickle & Bonner, LLP Can Help

At McNickle & Bonner, LLP, our elder law and Medicaid planning attorneys guide clients through the complexities of both programs. We help families:

• Qualify for Medicaid while preserving assets

• Establish trusts and other legal protections

• Navigate the application and appeals process

• Protect the family home from Medicaid recovery

• Create comprehensive long-term care plans tailored to individual needs

Our goal is to give clients peace of mind knowing their loved ones will receive quality care without sacrificing a lifetime of savings.

The Bottom Line

Medicare and Medicaid both play vital roles in senior healthcare—but they serve different functions. Medicare offers federal health insurance for older adults, while Medicaid provides essential long-term care coverage for those who meet financial qualifications.

By working with McNickle & Bonner, LLP, you can develop a smart, proactive plan that protects your assets, safeguards your home, and ensures access to the care you need.

Contact McNickle & Bonner, LLP today to schedule a consultation with an experienced elder law attorney and start planning your family’s future with confidence.