Yes, Medicaid is health insurance, but it works differently than private plans

Medicaid is a government health insurance program that covers medical costs for people with low income. It is not the same as private health insurance you buy from a company, and it is not the same as Medicare (which covers people 65 and older). Medicaid is run by individual states with federal funding, so the coverage, income limits, and rules vary depending on where you live.

When you have Medicaid, the program pays doctors, hospitals, and pharmacies directly for your care. You typically pay little or nothing out of pocket for covered services. The catch is that not all doctors accept Medicaid, and not all treatments are covered — the state decides what is included.

Key Takeaways

  • Medicaid is government health insurance for people with low income, not a private insurance product or a loan.
  • Each state runs its own Medicaid program with different income limits, covered services, and participating providers.
  • Medicaid covers doctor visits, hospital stays, prescription drugs, and preventive care, but coverage rules vary by state.
  • You do not pay premiums for most Medicaid plans, though some states charge small copays for certain services.
  • Medicaid is different from Medicare, which is federal insurance for people 65 and older regardless of income.

What Medicaid actually covers

Medicaid covers the basics: doctor visits, hospital stays, emergency care, lab tests, X-rays, and prescription drugs. Most Medicaid plans also cover preventive services like vaccines and cancer screenings at no cost to you. Mental health and substance abuse treatment are covered in most states, though the number of visits or providers may be limited.

Dental, vision, and hearing coverage vary widely by state. Some states include all three; others cover only emergency dental care or vision for children. Long-term care (nursing homes and assisted living) is also covered in some states but not others. The only way to know what your state covers is to contact your state Medicaid office or check their website — coverage lists are public but different in every state.

Medicaid does not cover cosmetic procedures, most fertility treatments, or experimental drugs. It also does not cover services from providers outside the United States, and it does not pay for care you received before you were enrolled.

How Medicaid is different from private insurance

Private health insurance is a contract between you and an insurance company. You pay a monthly premium, and the company agrees to cover certain costs. Medicaid is a government program funded by taxes. You do not pay a premium (in most cases), and the state decides what is covered.

With private insurance, you choose from a list of plans with different deductibles, copays, and networks. With Medicaid, the state sets the rules. You cannot shop between plans the way you can with private insurance — you either have Medicaid or you do not, though some states offer a choice of managed care plans within Medicaid.

Private insurance companies can deny coverage for pre-existing conditions (though federal law now limits this). Medicaid cannot deny you based on health status or medical history. If you meet your state's income and other requirements, you are in.

How Medicaid is different from Medicare

Medicare is federal health insurance for people 65 and older, regardless of income. You pay into Medicare through payroll taxes while you work, and you become may be able to access at 65. Medicaid is for people of any age with low income. The two programs are completely separate, though some people may have access to for both (called "dual may be able to access").

Medicare has the same rules nationwide. Medicaid rules change from state to state. Medicare is run by the federal government. Medicaid is run by states. If you move to a different state, your Medicare coverage stays the same, but your Medicaid coverage may change or stop.

Income limits and how they work

Each state sets its own income limit for Medicaid. In some states, a single person can earn up to $18,000 per year and still may have access to. In others, the limit is much lower or much higher. Some states expanded Medicaid in 2014 to cover everyone earning up to 138% of the federal poverty line; others did not expand and have much stricter limits.

Income limits also depend on your household size and family status. A parent with children may have a higher income limit than a single adult in the same state. Some states count only earned income (wages); others count unearned income (Social Security, pensions, interest) as well. A few states have different rules for different groups — for example, pregnant women or children may have higher limits than working-age adults.

The only way to know if you meet your state's income limit is to check with your state Medicaid office or use your state's online screening tool. Income limits change every year, so even if you were denied before, you may may have access to now.

Costs you may pay as a Medicaid member

Most Medicaid plans do not charge a monthly premium. However, some states charge small copays when you see a doctor or fill a prescription — typically $1 to $5 per visit or drug. A few states charge a monthly premium for certain groups, usually $5 to $50 per month depending on income.

Medicaid does not use deductibles the way private insurance does. You do not have to pay a large amount before coverage starts. However, some states charge copays for emergency room visits if the visit was not truly an emergency, or for non-emergency transportation.

If you cannot afford even small copays, tell your doctor or pharmacy — many Medicaid programs waive copays for people with very low income or for certain services like preventive care. Copay amounts and rules are set by your state, so check your state's Medicaid website or call their customer service line to learn what you might owe.

How to use Medicaid once you have it

When you are enrolled in Medicaid, you receive a card or a notice with your member ID number. You show this card to your doctor, hospital, or pharmacy. The provider checks with Medicaid to confirm you are enrolled and what services are covered. You pay any copay that applies, and Medicaid pays the rest.

Not all providers accept Medicaid. Before you schedule an appointment, call ahead and ask if the doctor or clinic takes Medicaid. If your state uses managed care, you may have to choose a primary care doctor from a specific network, and you may need a referral to see a specialist. If your state uses fee-for-service Medicaid, you can usually see any provider who accepts Medicaid without a referral.

If a provider refuses to treat you because you have Medicaid, or if Medicaid denies a service you think should be covered, you have the right to file a complaint or appeal. Your state Medicaid office can explain how.

Frequently Asked Questions

Is Medicaid the same as welfare?

Medicaid is health insurance, not cash assistance. You may receive Medicaid and also receive cash welfare (called TANF or general assistance in most states), but they are separate programs. Medicaid covers medical costs; welfare provides money for living expenses. You can have one without the other.

Can I have both Medicaid and private insurance?

Yes. If you have a job that offers health insurance, you can keep that plan and also have Medicaid. Medicaid becomes the secondary payer, meaning private insurance pays first, and Medicaid covers costs the private plan does not. This is called "coordination of benefits."

What happens to my Medicaid if I get a job?

It depends on how much you earn and your state's rules. In most states, you can earn some income and keep Medicaid. Many states allow you to keep Medicaid for several months even after your income goes above the limit, as long as you report the change. Some states have special programs for working people with disabilities. Contact your state Medicaid office to learn the exact rules where you live.

Does Medicaid cover dental work?

Dental coverage varies by state. Some states cover routine cleanings, fillings, and extractions for adults. Others cover only emergency dental care. Many states cover more dental services for children than for adults. Check your state Medicaid website or call their customer service line to find out what dental services are covered where you live.

Can I use Medicaid in a different state?

Medicaid is state-based, so your coverage ends when you move. You must apply for Medicaid in your new state. Coverage rules, income limits, and covered services are different in each state, so you may may have access to in one state but not another. Apply as soon as you move to avoid a gap in coverage.