Medicare vs. Medicaid: What Each Covers for Aging Parents — A Guide for the Sibling Who’s Out of the Loop

Medicare and Medicaid are the two largest public health programs that aging adults and their families rely on — and they’re genuinely confusing, in part because the names are similar and in part because most people don’t encounter them until they’re suddenly in a situation where they need to figure out what their parent’s coverage actually includes.

Here’s a plain-language explanation of what each program is, what it covers, and how families use them in practice.

The Core Difference

Medicare is federal health insurance for people 65 and older (and some younger people with disabilities). It’s available regardless of income or assets. Most people who have worked and paid payroll taxes receive Medicare automatically when they turn 65.

Medicaid is a joint federal-state program for people with low income and limited assets. Eligibility rules vary by state, but Medicaid is generally means-tested — you have to qualify financially. Many people who are middle class for most of their lives eventually “spend down” to Medicaid eligibility after long-term care costs deplete their savings.

The key practical difference: Medicare is universal for people 65+ (mostly). Medicaid depends on financial eligibility.

What Medicare Covers

Medicare is divided into several parts:

Part A — Hospital Insurance

Covers inpatient hospital stays, skilled nursing facility (SNF) care, hospice care, and some home health services.

The SNF benefit is important and frequently misunderstood. Medicare covers a stay in a skilled nursing facility after a qualifying 3-day inpatient hospital stay — but coverage is limited and has specific requirements:

• Days 1–20: Medicare covers 100% of the approved cost
• Days 21–100: Medicare covers costs above a daily coinsurance amount (in 2024, $200/day); supplemental insurance often covers this gap
• After day 100: Medicare pays nothing

This means Medicare does not cover long-term nursing home care. Families often assume Medicare will cover a parent’s nursing home stay indefinitely — it won’t. It covers a limited rehabilitative stay following a hospital admission.

Part B — Medical Insurance

Covers outpatient care: doctor visits, preventive services, diagnostic tests, outpatient surgery, mental health services, and most durable medical equipment (wheelchairs, walkers, hospital beds for home use).

Part B requires a monthly premium. Most Medicare recipients pay the standard premium, though higher-income recipients pay more.

Part C — Medicare Advantage

An alternative way to receive Medicare benefits through a private insurance plan. These plans must cover everything Parts A and B cover, and typically include Part D as well. Some include dental, vision, or hearing — benefits not available in original Medicare.

Medicare Advantage plans can have different networks and prior authorization requirements than original Medicare. Families evaluating care options should understand which plan type their parent has.

Part D — Prescription Drug Coverage

Covers prescription drugs. Part D plans are offered by private insurers through Medicare and vary in which drugs are covered and at what cost. The formulary (list of covered drugs) varies by plan; switching plans during open enrollment can significantly change medication costs.

What Medicare Doesn’t Cover

Medicare does not cover:

• Long-term custodial care — help with daily activities (bathing, dressing, meals, transportation) that isn’t skilled nursing care. This is the biggest gap for families caring for aging parents.
• Dental care (in original Medicare)
• Vision care (in original Medicare)
• Hearing aids (in original Medicare)
• Most care outside the United States

What Medicaid Covers

Medicaid covers a broad range of services and is the primary payer for long-term care in the United States. For families whose parents can no longer afford private-pay care, Medicaid is often what makes nursing home or home-based long-term care financially possible.

Long-term nursing home care: Medicaid covers nursing home care indefinitely for eligible recipients — this is the coverage Medicare doesn’t provide. Once a person has met the state’s financial eligibility criteria, Medicaid pays for ongoing skilled nursing facility care.

Home and Community-Based Services (HCBS): Most states have Medicaid waiver programs that pay for in-home care, adult day services, and other supports that allow people to remain in their homes rather than moving to a nursing facility. Waiver programs vary significantly by state and often have waiting lists.

Medical care: For people who qualify for both Medicare and Medicaid (“dual eligible”), Medicaid often covers cost-sharing that Medicare requires — premiums, deductibles, and copays. This is significant: a person who is dual-eligible may have almost no out-of-pocket medical costs.

Medicaid Eligibility

Eligibility rules vary by state. Generally, a person must have:

Low income: Usually at or below a percentage of the federal poverty level, though rules vary especially for long-term care.

Limited assets: Countable assets (savings, investments, non-primary-residence property) typically must be below a threshold — often around $2,000 for an individual in many states, though some assets (the primary home under certain conditions, one car, household goods) are often exempt.

The “spend down” process: Many middle-class families eventually reach Medicaid eligibility after spending down assets on long-term care — nursing home care at $8,000–$12,000/month depletes savings quickly. Planning how and in what order assets are spent, and understanding what the state’s lookback rules are for asset transfers, is a significant part of elder law practice.

Lookback period: States review asset transfers made in the 60 months (5 years) prior to a Medicaid application. Transfers made to family members to qualify for Medicaid faster are generally penalized with a period of Medicaid ineligibility. This is complicated — consult an elder law attorney before making any asset transfers in anticipation of Medicaid need.

Medicare and Medicaid Together

People who qualify for both Medicare and Medicaid are called “dual eligible.” This is common for elderly adults in nursing facilities: Medicare is their primary health insurance, and Medicaid covers long-term care costs and cost-sharing.

Understanding which program covers which service — and in what order — matters when navigating bills and care decisions. Generally, Medicare pays first; Medicaid pays for remaining costs and things Medicare doesn’t cover.

Practical Takeaways for Families

Medicare won’t cover long-term care. The most important thing to understand. If your parent needs ongoing help with daily living — a nursing home, an assisted living facility, or regular in-home aide visits for non-medical care — Medicare doesn’t pay for it.

Long-term care options: Families typically cover long-term care through private pay (personal savings), long-term care insurance (if it was purchased in advance), Medicaid (after spending down), or veterans’ benefits (for qualifying veterans).

Review Part D during open enrollment. Medicare’s prescription drug open enrollment period runs October 15 – December 7 each year. Coverage choices made now affect drug costs starting in January. If your parent’s medication list has changed, reviewing plan options is worth doing.

Medicaid planning is complicated and time-sensitive. If your parent may need Medicaid in the future, consulting an elder law attorney sooner rather than later allows for proper planning. The 5-year lookback period means planning needs to start well before care is needed.

Know what coverage your parent actually has. Ask for the insurance card, get the Medicare Summary Notices, understand the plan type (original Medicare vs. Medicare Advantage). Families who don’t know what coverage their parent has often discover gaps at the worst possible time.

Getting Help

State Health Insurance Assistance Programs (SHIP) provide free counseling to help Medicare beneficiaries understand their options. Find your state’s program at shiphelp.org.

Area Agencies on Aging can help connect families to Medicaid planning resources and local benefits navigators. Use the Eldercare Locator at eldercare.acl.gov or call 1-800-677-1116.

Elder law attorneys specialize in Medicaid planning, benefits navigation, and the legal and financial aspects of long-term care. The National Academy of Elder Law Attorneys has a directory at naela.org.

Keeping the Care Coordinated

Once coverage is understood, the day-to-day coordination of a parent’s care — tracking medications, managing appointments across specialists, keeping the family informed — continues to be an ongoing family effort.

Zenia Care gives caregiving families a shared, organized place for that coordination: medications, appointments, tasks, and care updates in one space, accessible to everyone involved.

Zenia Care gives you and your siblings one shared place for a parent’s care information — medications, appointments, and care notes — so the sibling managing the insurance isn’t the only one who knows what’s going on. Available on the App Store and Google Play.