Maryland Life and Health Insurance License Practice Exam

What is one key difference between Medicare and Medicaid?

1. Medicare is generally for low-income individuals

2. Medicaid is primarily federal, while Medicare is state-funded

3. Medicare is age-based coverage, while Medicaid is need-based

4. Medicaid covers prescription drugs only

The correct answer is: Medicare is age-based coverage, while Medicaid is need-based

The distinction that Medicare is age-based coverage, while Medicaid is need-based, captures the fundamental difference between these two programs. Medicare is primarily designed to provide health insurance to individuals aged 65 and older, regardless of their income or health status, which allows older adults to access medical care as they age. In contrast, Medicaid serves low-income individuals and families, offering health coverage based on financial need rather than age. Understanding this difference is essential for recognizing how each program operates within the broader healthcare system. Medicare ensures that older adults have access to necessary medical services, while Medicaid focuses on supporting those who may not be able to afford healthcare due to their economic situation, regardless of their age. This is why Medicare is widely associated with senior citizens and Medicaid with financially vulnerable populations.