Medicaid and the Marketplace Are Two Separate Programs

Medicaid is a joint federal and state program that covers low-income people. The Marketplace (also called the Health Insurance Marketplace or Healthcare.gov) is where people shop for private insurance plans, some of which may be subsidized based on income. They are not the same thing, and you cannot enroll in Medicaid through the Marketplace.

If you are looking for coverage and your income is low enough, you may be directed to Medicaid when you start a Marketplace application. This happens because the Marketplace system checks your income against your state's Medicaid limits first. If you fall below that threshold, the system will tell you that you do not meet Marketplace income requirements and will direct you to your state Medicaid office instead.

The confusion arises because both programs exist to cover people who cannot afford private insurance on their own, and both use income as the main factor in determining who can enroll. But the programs are run separately, have different rules, and cover different groups of people depending on where you live.

Key Takeaways

  • Medicaid is a government program for low-income people; the Marketplace is where private insurance companies sell plans, some with government subsidies.
  • You cannot enroll in Medicaid through the Marketplace — if your income is too low for Marketplace plans, you must contact your state Medicaid office directly.
  • Medicaid income limits vary by state and by category (children, adults, seniors, disabled people), while Marketplace subsidies phase out at higher income levels.
  • If you do not may have access to for Medicaid but your income is low to moderate, you may find cheaper Marketplace plans through tax credits and cost-sharing reductions.

How Income Determines Which Program You Might Use

Your household income is the primary factor that determines whether you are directed toward Medicaid or the Marketplace. Each state sets its own Medicaid income limit, and these limits differ by category — children often have higher income limits than adults, and some states cover adults at different thresholds than others.

When you enter your income on Healthcare.gov or your state's Marketplace site, the system compares it to your state's Medicaid limits. If you fall below the limit for your category, you will be told that Medicaid may be available to you and will be given contact information for your state Medicaid office. If your income is above your state's Medicaid limit but below the Marketplace upper limit (currently around 400% of the federal poverty level), you will see Marketplace plans with tax credits that reduce your monthly premium.

The income thresholds change each year, and they vary significantly by state. A single adult with the same income might may have access to for Medicaid in one state and be directed to the Marketplace in another.

What Medicaid Covers Versus Marketplace Plans

Medicaid typically covers doctor visits, hospital care, prescription drugs, and preventive services with little or no cost to you. The exact coverage depends on your state's Medicaid program, but most cover emergency care, mental health services, and maternity care. You do not pay a monthly premium for Medicaid — it is funded by taxes.

Marketplace plans are private insurance products sold by companies like Blue Cross, Aetna, and UnitedHealth. You pay a monthly premium (which may be reduced by a tax credit if your income qualifies), and you also pay a deductible, copays, and coinsurance when you use care. Marketplace plans must cover the same essential health benefits as Medicaid — preventive care, hospitalization, prescription drugs, and others — but your out-of-pocket costs are usually higher.

If you may have access to for both Medicaid and a Marketplace plan (which is rare), Medicaid is almost always the better choice because it has lower or no out-of-pocket costs. Most people who may have access to for Medicaid will not see Marketplace plans as an option.

When You Might See Marketplace Plans Instead of Medicaid

You will be directed to Marketplace plans if your income is above your state's Medicaid limit. In states that have not expanded Medicaid to cover all low-income adults, this can mean a gap — you earn too much for Medicaid but not enough to avoid the Marketplace premium without a subsidy. In states that have expanded Medicaid, this gap is much smaller or does not exist.

If you fall into this income range, the Marketplace can offer substantial help. Tax credits reduce your monthly premium, and cost-sharing reductions lower your deductible and copays if your income is between 100% and 250% of the federal poverty level. For some people in this range, a Marketplace plan with subsidies costs less per month than Medicaid would in terms of total out-of-pocket spending, though Medicaid still typically has lower costs overall.

You can enroll in a Marketplace plan during the annual open enrollment period (usually November through January) or if you have a may have access to life event like losing other coverage, moving, or having a baby.

How to Know Which Program You Actually may have access to For

The fastest way to find out is to start an application on Healthcare.gov or your state's Marketplace website. You will enter your income, household size, and state, and the system will tell you immediately whether you may be directed to Medicaid or whether you can enroll in Marketplace plans. If you are directed to Medicaid, the site will provide your state Medicaid office's contact information and phone number.

You can also contact your state Medicaid office directly without going through the Marketplace. Each state has a Medicaid hotline or website where you can ask about income limits for your category and begin the enrollment process. The phone number is usually on your state's health department website or on the Medicaid.gov website.

If you are unsure whether you may have access to for either program, a local community health center or nonprofit organization can often help you understand your options. Many offer free assistance with applications and can explain the differences between programs in your state.

What Happens If Your Income Changes

If you are enrolled in Medicaid and your income rises above your state's limit, you will lose Medicaid coverage. Your state Medicaid office will notify you of the date your coverage ends, usually giving you at least 30 days' notice. At that point, you can enroll in a Marketplace plan, and if your new income still qualifies you for subsidies, your premium will be reduced accordingly.

If you are enrolled in a Marketplace plan and your income drops below your state's Medicaid limit, you can contact your state Medicaid office to enroll in Medicaid. This is considered a may have access to life event, so you can also update your Marketplace application to reflect the income change, and the system will redirect you to Medicaid if appropriate.

It is important to report income changes to both programs as soon as they happen. If you do not report a change and you were receiving subsidies you were not may have access to to, you may have to repay some of that money when you file your taxes.

Frequently Asked Questions

Can I use my Medicaid card at any doctor or hospital?

Medicaid coverage varies by state and by plan. Most Medicaid programs have a network of providers, and you may need to choose a primary care doctor. Some providers do not accept Medicaid. Call the number on your Medicaid card or check your state's Medicaid website to find doctors and hospitals in your network before you need care.

If I am on Medicaid, can I switch to a Marketplace plan?

You can only enroll in a Marketplace plan during open enrollment (usually November through January) or if you have a may have access to life event like losing Medicaid coverage, moving to a new state, or having a baby. If your income rises above your state's Medicaid limit, you will lose Medicaid and can then enroll in a Marketplace plan.

What if my state did not expand Medicaid?

In non-expansion states, the Medicaid income limit for adults is often very low, and many working adults do not may have access to. If your income is above your state's limit but below the Marketplace upper limit, you will see Marketplace plans with tax credits. Some people in this gap have no affordable coverage option, which is why many states have chosen to expand Medicaid.

Do I have to choose between Medicaid and Marketplace, or can I have both?

You cannot be enrolled in both programs at the same time. If you may have access to for Medicaid, you must use Medicaid and cannot enroll in a Marketplace plan. If your income is above your state's Medicaid limit, you can only use the Marketplace.

How do I know my state's Medicaid income limit?

Your state Medicaid office publishes income limits for each category (children, pregnant people, adults, seniors, disabled people). You can find this information on your state's Medicaid website or by calling the Medicaid hotline. Income limits change each year, usually in January.