Marketplace insurance and Medicaid are separate programs with different rules, income limits, and how you pay

Marketplace insurance (also called the ACA marketplace or exchange) and Medicaid are not the same thing, though they sometimes overlap. Marketplace insurance is sold through Healthcare.gov or your state's health insurance website. You buy a plan, pay a monthly premium, and choose your coverage level. Medicaid is a government program that covers low-income people and certain other groups — you don't buy it the way you buy marketplace insurance, and there's no premium in most states.

The key difference: Marketplace insurance is available to anyone who wants to buy it, regardless of income. Medicaid has strict income and asset limits that vary by state. Some people are poor enough for Medicaid but not poor enough for marketplace subsidies. Others earn too much for Medicaid but may have access to for marketplace tax credits that lower their monthly cost. A few people can use both programs at the same time, though that's rare.

Key Takeaways

  • Marketplace insurance requires you to pay a monthly premium and choose a plan; Medicaid is a government program with no premium in most states and income-based may be able to access.
  • You cannot use a marketplace plan and Medicaid at the same time for the same person — you must pick one.
  • If you're offered Medicaid, you generally cannot buy marketplace insurance with a subsidy; if you turn down Medicaid, you may be able to use marketplace subsidies instead.
  • Income limits for Medicaid vary widely by state, but marketplace subsidies are available to people earning up to about 400% of the federal poverty line in most states.
  • Your state's Medicaid rules determine whether you can have both programs — some states have expanded Medicaid and others have not, which changes who qualifies.

When you can't use both at the same time

Federal law says you cannot be covered by both Medicaid and a marketplace plan for the same time period. If you're enrolled in Medicaid, you're not allowed to buy a marketplace plan with a subsidy. If you're offered Medicaid and turn it down, you can then buy marketplace insurance and may receive a tax credit to lower your premium — but only if you're not otherwise may be able to access for Medicaid.

This matters because some people assume they can use whichever program is cheaper. That's not how it works. The system forces you to choose: if Medicaid is available to you in your state, you must use it before you can access marketplace subsidies. This is called the "Medicaid coverage rule."

How income limits differ between the two programs

Medicaid income limits depend entirely on your state. Some states cover people earning up to 138% of the federal poverty line; others cover up to 100% or less. A few states have not expanded Medicaid at all, so only certain groups (children, pregnant people, elderly people, or people with disabilities) may have access to, regardless of income. You can find your state's exact limit on your state Medicaid website or by calling your local Medicaid office.

Marketplace subsidies work differently. You can receive a tax credit if your income falls between 100% and 400% of the federal poverty line in most states — that's roughly $14,580 to $58,320 for a single person in 2024, though these numbers change yearly. If you earn more than 400% of the poverty line, you can still buy marketplace insurance, but you won't receive a subsidy and will pay the full premium yourself.

This creates a gap: if your state has not expanded Medicaid and you earn just above your state's limit but below 100% of the federal poverty line, you may not may have access to for either program. Some states have closed this gap with their own programs, but not all.

What happens if you're offered Medicaid

If you're offered Medicaid coverage, you must accept it to be covered. You cannot turn it down and then buy marketplace insurance with a subsidy instead — the law doesn't allow that. However, you can turn down Medicaid if you prefer to buy marketplace insurance and pay the full premium yourself, though this is rarely a good financial choice.

Some people turn down Medicaid because they want to keep a specific doctor or because they believe marketplace insurance offers better coverage. If you do this, you lose the right to use marketplace subsidies for that year. You would pay full price for any marketplace plan you buy. This decision is permanent for that year, so think carefully before declining Medicaid.

How to know which program you may have access to for

The easiest way to find out is to start an application on Healthcare.gov or your state's marketplace website. During the application, you'll enter your income and household size. The system will tell you whether you may have access to for Medicaid in your state. If you do, it will direct you to apply for Medicaid instead of offering you a marketplace plan with a subsidy.

You can also contact your state Medicaid office directly to ask about income limits and whether you may have access to. Many states have a phone number or online tool on their Medicaid website. If you're unsure which state program to contact, call 211 (a free referral service) and they can direct you to the right office.

Medicaid expansion and how it affects your options

Whether your state has expanded Medicaid under the Affordable Care Act changes who qualifies. In expansion states, most adults earning up to 138% of the federal poverty line may have access to for Medicaid. In non-expansion states, Medicaid is usually limited to children, pregnant people, elderly people, people with disabilities, and a few other groups — even if their income is very low.

If you live in a non-expansion state and don't fit into one of those categories, you won't may have access to for Medicaid no matter how poor you are. You would then be able to buy marketplace insurance and receive a subsidy if your income is between 100% and 400% of the federal poverty line. This is one reason why income and location matter so much when you're looking for coverage.

Switching between programs during the year

You cannot switch from Medicaid to a marketplace plan in the middle of the year just because you want to. You can only change plans during the annual open enrollment period (usually November 15 to January 15) or if you have a may have access to life event — like losing your job, moving to a new state, getting married, or having a baby.

If your income changes and you no longer may have access to for Medicaid, you may be able to switch to a marketplace plan right away. Similarly, if your income drops and you become newly may be able to access for Medicaid, you can enroll immediately. But if you're just unhappy with your current program and your circumstances haven't changed, you'll have to wait for open enrollment.

Frequently Asked Questions

Can I use marketplace insurance if I'm already on Medicaid?

No. Federal law prohibits you from being enrolled in both programs at the same time. If you're on Medicaid and want marketplace insurance instead, you must first end your Medicaid coverage, then buy a marketplace plan and pay the full premium — you won't receive a subsidy.

What if I earn too much for Medicaid but too little for marketplace subsidies?

This gap exists in non-expansion states. If you fall into it, you can buy marketplace insurance but will pay the full premium with no subsidy. Some states have created their own programs to cover this group. Contact your state Medicaid office or call 211 to learn what options exist in your state.

If I turn down Medicaid, can I get marketplace subsidies instead?

Yes, but only if you're not otherwise may be able to access for Medicaid. If you turn down Medicaid when you may have access to for it, you lose access to marketplace subsidies for that year. You can buy a marketplace plan, but you'll pay full price. This decision is final for the year.

How do I know if my state expanded Medicaid?

You can search your state's name plus "Medicaid expansion" online, or call your state Medicaid office. Expansion states cover most adults earning up to 138% of the federal poverty line; non-expansion states limit Medicaid to specific groups like children and elderly people.

What if my income changes during the year?

If your income drops and you become may be able to access for Medicaid, you can enroll immediately. If your income rises and you no longer may have access to for Medicaid, you can switch to a marketplace plan right away. You don't have to wait for open enrollment when your income changes.