Is AARP Medicare or Medicaid?

Choosing the right health insurance coverage is crucial for getting the medical care you need. Two major public health insurance programs in the United States are Medicare and Medicaid. Many people confuse these two programs or are unsure of the differences between them. 

AARP Medicare is a type of health insurance plan offered by private companies, specifically UnitedHealthcare, that provides beneficiaries with access to the federal Medicare program. It is not Medicaid; it follows the same rules as Original Medicare and is primarily for individuals aged 65 and older or those with certain disabilities.

AARP Medicare plans are offered by private insurance companies and provide beneficiaries with access to the federal Medicare program. Medicaid, on the other hand, is a joint state and federal program that provides health coverage for certain low-income individuals. While both programs help people pay for healthcare, they have some key differences in terms of eligibility, coverage, costs, and administration. 

Understanding the distinctions between AARP Medicare plans and Medicaid is important to determine which type of coverage may be right for your situation. This article will compare and contrast these two public health insurance options to provide more clarity on how they work.

What Is Medicare?

Medicare is a federal health insurance program primarily for people aged 65 and older, as well as younger people with certain long-term disabilities. The different parts of Medicare help cover specific services:

  • Medicare Part A helps pay for inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services.
  • Medicare Part B helps pay for doctor visits, outpatient care, preventive services, ambulance transportation, and durable medical equipment.
  • Medicare Part C (Medicare Advantage) allows private insurers to provide Medicare benefits through Medicare Advantage plans.
  • Medicare Part D helps pay for prescription drug coverage.

Medicare is administered by the Centers for Medicare and Medicaid Services (CMS), a division of the U.S. Department of Health and Human Services. It is funded by a portion of the payroll taxes paid by workers and their employers. Individuals do not have to pay into the system to be eligible for Medicarebenefits once they turn 65.

What Is Medicaid?

Medicaid is a public health insurance program that provides coverage to eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. It is jointly funded by state and federal governments and managed by the states. Each state establishes its own eligibility standards, benefits packages, and provider payments within federal guidelines.

Medicaid serves low-income Americans and provides a safety net for those with little or no income. To qualify for Medicaid, applicants must pass certain tests related to their income and assets. Benefits often include hospitalizations, doctor visits, preventive services, mental health services, and more. There are no premiums or deductibles for Medicaid coverage.

While Medicare is a purely federal program, Medicaid involves both state and federal participation. States administer Medicaid according to federal requirements set by CMS. Every state’s Medicaid program is required to cover some basic services, but states can customize benefits packages beyond the minimum standards.

What Are the Eligibility Requirements for AARP Medicare?

AARP Medicare plans have the same eligibility requirements as Original Medicare. The primary eligibility requirements are:

  • Being at least 65 years old
  • Being a U.S. citizen or permanent legal resident for 5+ years
  • Having worked and paid Medicare taxes for at least 10 years 

People under age 65 may also qualify for Medicare if they have certain long-term disabilities or end-stage renal disease (ESRD). There are no income limits to enroll in Medicare.

The key thing to understand is that AARP Medicare plans are just a type of Medicare. The AARP brand is used for Medicare plans administered by UnitedHealthcare. To enroll in AARP Medicare, you must first be eligible for Medicare as determined by the Social Security Administration.

What Are the Eligibility Requirements for Medicaid?

Medicaid has strict income and asset eligibility requirements that vary by state. Applicants must meet certain financial criteria related to income and assets to qualify. Some key Medicaid eligibility factors include:

  • Having income below a certain level (e.g. 100% of federal poverty level)
  • Having limited assets (e.g. $2,000 for an individual, $3,000 for couples)
  • Being pregnant, disabled, elderly, or a child
  • Being a U.S. citizen or documented immigrant

Medicaid eligibility is based on a combination of federal and state rules. Many states have expanded Medicaid coverage to non-elderly adults up to 138% of the federal poverty level. The income thresholds are higher for pregnant women and children. 

While Medicare eligibility is based primarily on age and work history, Medicaid eligibility relies on current financial need. The strict income and asset limits help restrict Medicaid to lower-income Americans.

What Types of Coverage Do AARP Medicare and Medicaid Provide?

1. AARP Medicare Coverage

AARP works with UnitedHealthcare to offer the following main types of Medicare plans:

  • Medicare Advantage (Part C) – These are Medicare-approved private plans that provide all Original Medicare (Part A and Part B) coverage plus additional benefits. Many include prescription drugs (Part D).
  • Medicare Supplement (Medigap) – These plans help pay Medicare out-of-pocket costs like copayments, coinsurance, and deductibles. Some offer basic benefits while others are more comprehensive.
  • Medicare Part D plans – These stand-alone prescription drug plans help cover the costs of prescription medications.

All AARP Medicare plans include full Medicare Part A and Part B coverage. The different plan types offer extra coverage and features for an additional premium. Many AARP Medicare Advantage plans have $0 premiums or low monthly premiums.

2. Medicaid Coverage

Medicaid coverage varies significantly by state within federal guidelines. Some key services that may be included:

  • Inpatient and outpatient hospital services
  • Doctor visits
  • Emergency medical transportation 
  • Preventive care and immunizations 
  • Mental health and substance abuse treatment
  • Prescription drugs
  • Long-term care (in some states)
  • Dental and vision care (in some states)

The mandatory core benefits include hospital care, doctor visits, lab tests, x-rays, nursing home care, home health services, and more. States can expand benefits like dental, vision, and prescription drugs through Medicaid waivers.

Unlike most AARP Medicare plans, Medicaid does not charge any premiums or deductibles. Small copays may apply. The coverage is comprehensive for beneficiaries due to Medicaid’s focus on low-income populations.

What Are the Differences Between AARP Medicare and Medicaid?

While both AARP Medicare and Medicaid involve public health coverage, there are several key differences between these two insurance options:

1. Cost

  • AARP Medicare – Requires payment of Medicare Part B premiums ($164.90/month in 2023). Medicare Advantage and Part D plans charge additional premiums.
  • Medicaid – No monthly premiums or deductibles. Minimal copays may apply. Completely free for beneficiaries.

2. Eligibility

  • AARP Medicare – Based primarily on age (65+) and work history. 
  • Medicaid – Based on income, assets, and categories like disability, children, and pregnancy. Designed for low-income Americans.

3. Coverage

  • AARP Medicare – Covers all services under Original Medicare. Supplemental benefits with Advantage and Supplement plans.
  • Medicaid – Covers mandatory and optional services set by states. More robust benefits than Original Medicare.

4. Services

  • AARP Medicare – Covers medically necessary care, preventive services, hospitalization, and prescription drugs.
  • Medicaid – Comprehensive coverage including vision, dental, mental health, long-term care, and transportation.

5. Prescription Drugs

  • AARP Medicare – Part D and Medicare Advantage plans add drug coverage. Many have deductibles and copays. 
  • Medicaid – Prescription drug benefits included in coverage. Minimal copays may apply.

6. Long-term Care

  • AARP Medicare – Does not cover long-term custodial care. Can pay for skilled nursing facility stays up to 100 days after a hospitalization.
  • Medicaid – Covers nursing home and home health care. Pays for approximately 50% of long-term care services in U.S.

7. Claim Processing

  • AARP Medicare – Claims processed by Medicare and UnitedHealthcare. Pay providers directly.
  • Medicaid – States pay claims to providers directly. Minimal paperwork for beneficiaries.

What Is the Best Option for You: AARP Medicare or Medicaid?

Determining whether AARP Medicare or Medicaid is the better choice depends primarily on your income level and medical needs. Key questions to ask yourself:

  • Does my income qualify for Medicaid coverage in my state? There are strict financial eligibility limits.
  • Do I have costly medical conditions that require comprehensive coverage? Medicaid may offer richer benefits. 
  • Do I need coverage for long-term custodial care? Medicare does not cover this while Medicaid does.
  • Am I retired and earning traditional Medicare eligibility due to my age and work history? AARP Medicare will be a better fit.
  • Do I take expensive prescription drugs? Medicaid prescription coverage often has lower out-of-pocket costs.
  • Do I want access to nationwide coverage and provider choice? Medicare may be preferable to state-based Medicaid.

For low-income seniors, being dually eligible for both Medicare and Medicaid is common to get the most complete coverage. Higher earners who worked for 10+ years generally find AARP Medicare plans provide suitable coverage once they turn 65.


In summary, while both are public programs, AARP Medicare plans and Medicaid have some significant differences in terms of eligibility rules, costs, covered services, administration, and more. AARP Medicare plans follow the same rules as Original Medicare whereas Medicaid is a separate joint state-federal program for certain groups with limited income and assets. Understanding the nuances between these two options is crucial for choosing the coverage that best fits your healthcare and financial needs.