Most Americans are confused about the difference between Medicare and Medicaid. Here's a brief synopsis:

Medicare = Federal Medical Care Insurance
Medicaid = State/Federal Medical Aid For The Impoverished

Both programs are part of the Social Security Act. There are major differences, however.
Medicare is the federally funded health insurance program. It provides health benefits to older Americans, to disabled individuals who have met specific disability guidelines, and to people with irreversible kidney failure or Lou Gehrig's Disease (ALS).

Traditional Part A covers inpatient hospital care, inpatient rehabilitation after a hospital stay, medical home health care, and hospice care. Just like other health insurance policies, there are deductibles and co-payments that must be satisfied.

Individuals who have reached age 65 can receive Medicare Part A, even if they have not yet reached the age to receive full Social Security benefits There is no additional cost for Medicare Part A because they contributed to Medicare during their working years.

Traditional Part B covers doctor visits and services, and outpatient services such as therapy and rehabilitation, diagnostic tests, outpatient hospital services, ambulances, durable medical equipment, and some supplies.

After an annual deductible is met, Medicare Part B pays 80% of approved charges.
Enrollment in Medicare Part B is optional and voluntary. Participants pay a monthly premium. The Part B premium goes up every year. You can check on this year's premium on the Medicare website.

Because Medicare is a federal program, Parts A and B are generally uniform from state to state across the country.

Medicare Part D is the Medicare drug benefit which covers prescription drug costs through policies purchased from private insurance companies that participate in the Medicare-regulated program. Although enrollment is voluntary, Medicare does its best to encourage enrollment as soon as a beneficiary is eligible by imposing a financial penalty for waiting. The selection of available plans is dependent on where the beneficiary lives. Medicare maintains a comprehensive geographic list of insurance companies offering Part D policies on their website.

Medicare Advantage or Medicare HMO (Medicare + Choice).  Individuals who are eligible for Medicare insurance have the option of enrolling in a managed care program instead of traditional Parts A and B.  Medicare + Choice programs are administered by private health insurance companies that contract with the federal government. Coverage and the kind of benefits offered varies by company and by geography, but all Medicare + Choice policies are required to offer the same basic coverage.

There is no income test required to qualify for any Medicare benefits.

Medicaid is an assistance program funded jointly by the federal government and the individual states. It is designed to assist low income individuals of all ages with medical costs. Because programs are administered by the individual states, financial and other eligibility requirements vary.

Many people who have Medicare coverage also qualify for Medicaid because of their low income status. In this case, Medicaid will often cover deductibles and co-payments (as well as some medications) that would otherwise have to be privately paid.

Medicaid is the primary government funding source for frail older people who need long-term custodial care in a nursing home. Medicare does not cover any kind of custodial care.