Medicaid is a government health insurance program, not a private insurance plan

Medicaid is a joint federal and state program that pays for medical care for people with low to moderate income. It is not private insurance you buy from a company — it is public coverage run by your state health department, with money from both the federal government and your state. Each state runs its own Medicaid program, so the rules, covered services, and income limits differ depending on where you live.

Medicaid covers doctor visits, hospital stays, prescription drugs, mental health services, and other medical care. Unlike private insurance, you do not pay a monthly premium to Medicaid itself — though some states charge small copays when you use services. The program is designed for people who cannot afford private insurance on their own.

Because Medicaid is state-run, the same income or family size that makes you covered in one state might not in another. Some states have expanded Medicaid to cover more people; others have not. This is why your state matters when you are looking into whether Medicaid might cover you.

Key Takeaways

  • Medicaid is government health insurance run by your state, not a private insurance company you pay monthly premiums to.
  • Each state sets its own income limits, covered services, and rules, so what is covered in your state depends on where you live.
  • You do not pay a monthly premium to Medicaid, though some states charge small copays when you visit a doctor or fill a prescription.
  • Medicaid covers hospital care, doctor visits, prescription drugs, mental health services, and other medical expenses for people with low to moderate income.
  • To learn whether you may be covered, you contact your state Medicaid office or use your state's online portal to check income limits and rules.

How Medicaid differs from Medicare and private insurance

Medicaid and Medicare are often confused because they sound similar, but they are completely different programs. Medicare is federal insurance for people age 65 and older, or for some younger people with disabilities — it is based on age or disability status, not income. Medicaid is based on income and is available to people of any age who meet their state's income and other requirements.

Private insurance is sold by insurance companies and you pay a monthly premium. Medicaid is government-run and you do not pay a premium — your state and the federal government fund it through taxes. With private insurance, you choose from plans offered by companies. With Medicaid, your state determines which doctors and hospitals you can use and what services are covered.

Some people have both Medicaid and Medicare — this is called being "dual may be able to access." This usually happens when someone is 65 or older and also has low income. In that case, Medicare is their primary insurance and Medicaid helps cover costs Medicare does not pay.

What Medicaid covers and what it does not

Medicaid covers a broad range of medical services. All state Medicaid programs must cover doctor visits, hospital inpatient and outpatient care, emergency services, lab work, X-rays, and nursing facility care. Most states also cover prescription drugs, mental health and substance use treatment, dental care, and vision care, though the details vary by state.

Medicaid does not cover everything. Cosmetic surgery, most dental work beyond basic care, and routine vision exams for adults are often not covered or only partially covered. Long-term care in a nursing home is covered only after you have spent down most of your savings — this is called "spend-down" and the rules are strict. Your state Medicaid office can tell you exactly what is and is not covered where you live.

Some services require prior approval from your state before the doctor can provide them. This means your doctor has to ask Medicaid permission before doing a procedure, and Medicaid decides whether it is medically necessary. This can add time to getting care, but it is meant to prevent unnecessary or very expensive treatments.

Income limits and how your state determines them

Each state sets its own income limit for Medicaid. In most states, the limit is based on the federal poverty level — for example, a state might cover people earning up to 138% of the federal poverty level. In 2024, the federal poverty level for a single person is around $14,600 per year, but this number changes yearly and varies by family size.

Some states have expanded Medicaid to cover more people, while others have kept the income limits lower. A few states have very restrictive limits and cover only certain groups like children, pregnant people, or people with disabilities. Because of this variation, someone with the same income might be covered in one state and not in another.

Your state also looks at your assets — the money and property you own — not just your income. Most states allow you to own a home and a car without losing Medicaid, but they count bank accounts and investments. The asset limits vary by state and by whether you are applying as an individual or a family.

How to learn about you may be covered in your state

The fastest way to learn about Medicaid in your state is to contact your state Medicaid office directly. You can find the phone number and website by searching "[your state] Medicaid" online. Most states also have an online portal where you can enter your income and family size to see whether you might be covered.

You can also call 211 (a free helpline) and ask for Medicaid information in your area. They can tell you your state's income limits, what documents you need, and how to start the process. Some community health centers and hospitals have staff who help people understand Medicaid and walk them through the steps.

When you contact your state, have ready your Social Security number, proof of income (like recent pay stubs or tax returns), proof of citizenship or legal residency, and information about anyone else in your household. Different states ask for different documents, so ask what you need before you apply.

Medicaid expansion and how it affects coverage

In 2014, states were given the option to expand Medicaid to cover more people with low income. States that expanded Medicaid now cover adults earning up to 138% of the federal poverty level. States that did not expand have kept their income limits lower and often cover only certain groups like children, pregnant people, parents, or people with disabilities.

As of 2024, most but not all states have expanded Medicaid. If you live in a state that has not expanded, you may not be covered even if you have very low income, unless you fall into a category your state does cover. This is one reason why your state makes such a difference in whether Medicaid is an option for you.

Medicaid expansion is a political decision that can change. Some states have expanded and then considered rolling back coverage. If you are covered by Medicaid, it is worth checking your state's website once a year to see whether the rules have changed.

How Medicaid works once you are covered

Once you are covered by Medicaid, you receive a card or a number that you show to your doctor or pharmacy. You choose a primary care doctor (or your state assigns one), and that doctor coordinates your care. When you need to see a specialist, your primary care doctor usually has to refer you first.

You pay little or nothing at the point of care — most Medicaid programs charge no copay for preventive services like checkups and vaccines, and small copays (usually $1 to $5) for other visits and prescriptions. Your state Medicaid office sends you information about copays and what you owe. If you cannot afford even a small copay, tell your doctor — they may be able to waive it.

Medicaid coverage can change if your income goes up, your family size changes, or you move to a different state. You are responsible for telling your state Medicaid office about changes in your life. If you do not report a change and you are no longer covered, you could end up with medical bills you have to pay yourself.

Frequently Asked Questions

Is Medicaid the same as welfare or food stamps?

Medicaid is health insurance, while welfare and food stamps are different programs that help with cash or food. You can have Medicaid without having welfare or food stamps, and vice versa. Some people have all three, but they are separate programs run by different offices.

Do I have to pay Medicaid back if my income goes up later?

No. Medicaid is not a loan. Once you receive coverage and care, you do not have to repay it if your income increases. However, you must report income changes to your state Medicaid office, and your coverage will end if you earn too much. After that, you would need to find other insurance.

Can I use Medicaid at any doctor or hospital?

Not necessarily. Medicaid only pays doctors and hospitals that have agreed to accept Medicaid patients. Your state provides a list of in-network providers. If you go to a doctor who does not accept Medicaid, you may have to pay the full bill yourself. Always ask before your visit whether a provider takes Medicaid.

What happens to my Medicaid if I move to a different state?

Your Medicaid coverage ends when you move. You must apply for Medicaid in your new state, which has its own income limits and rules. Some states cover more people than others, so you might be covered in your new state even if you were not in your old one, or vice versa. Apply as soon as you move so there is no gap in coverage.

Does having Medicaid affect my credit score?

No. Medicaid is health insurance and does not appear on your credit report. It does not affect your credit score. Medical debt that goes unpaid and is sent to a collection agency can hurt your credit, but having Medicaid itself does not.