The Affordable Care Act and Medicaid are separate programs, but they work together

The Affordable Care Act (ACA), often called Obamacare, is not Medicaid. The ACA is a federal law that changed how health insurance works in the United States. Medicaid is a separate program that provides health coverage to people with low incomes. The ACA did expand Medicaid in many states, which is why the two are often confused — but they operate under different rules, cover different groups of people, and work in different ways.

The ACA created new insurance marketplaces where people can buy private health plans. It also set rules for what those plans must cover and created tax credits to help people afford premiums. Medicaid, by contrast, is a direct government program that pays for medical care for people who meet income and other requirements. Some people use the ACA marketplace to find coverage; others use Medicaid; some use both at different times in their lives.

Key Takeaways

  • The ACA is a law that regulates private health insurance and created marketplaces where people shop for plans; Medicaid is a government program that directly pays for medical care.
  • The ACA expanded Medicaid in states that chose to do so, which is why many people gained Medicaid coverage after 2014, but the ACA itself is not Medicaid.
  • Your income, state of residence, and family size determine whether you can get Medicaid, an ACA tax credit, or both.
  • If you do not have health coverage, you can check whether you may have access to for Medicaid through your state's Medicaid office, or explore ACA marketplace plans at Healthcare.gov.

How the ACA expanded Medicaid in some states

Before 2014, Medicaid covered only certain groups: children, pregnant people, parents of young children, and people with disabilities. The ACA allowed states to expand Medicaid to cover all adults with income below a certain threshold — roughly 138 percent of the federal poverty line. States could choose whether to expand or not.

As of now, most states have expanded Medicaid, but not all. If you live in a state that expanded Medicaid, you may have become may be able to access for Medicaid coverage through the ACA expansion even if you do not fit the older categories. If you live in a state that has not expanded Medicaid, the old income and category rules still apply. This is why your state matters: two people with the same income and family size may may have access to for Medicaid in one state but not another.

Who gets Medicaid versus ACA marketplace coverage

Medicaid is for people with low incomes. The exact income limit depends on your state and family size. If you may have access to for Medicaid, you pay nothing or very little for coverage — there is no premium, and copays are usually small or zero.

The ACA marketplace is for people who do not have coverage through an employer or a government program. If your income is too high for Medicaid but you still cannot afford private insurance, you may get a tax credit through the ACA marketplace that lowers your monthly premium. If your income is above the marketplace threshold, you can still buy a plan there, but you pay the full price.

Some people fall into a gap: their income is above their state's Medicaid limit but below the threshold for ACA tax credits. This happens mainly in states that did not expand Medicaid. If this describes your situation, you can still buy an ACA marketplace plan, but you would pay the full premium without a tax credit.

How to find out which program you might use

Start by checking your state's Medicaid office website. You can search "[your state] Medicaid" to find the right agency. They will tell you the income limits for your state and family size, and whether you can apply. Many states let you apply online.

If you do not may have access to for Medicaid, or while you are waiting to hear back, you can look at ACA marketplace plans at Healthcare.gov. Enter your income, family size, and state, and the site will show you plans available to you and tell you whether you may have access to for a tax credit. You do not have to choose one or the other right away — you can explore both options.

If you are already on Medicaid and your income changes, report it to your state Medicaid office. Your coverage may change, or you may become may be able to access for an ACA tax credit instead. The same is true in reverse: if you have ACA marketplace coverage and your income drops, you may become may be able to access for Medicaid mid-year.

What the ACA requires all health plans to cover

The ACA set a list of things that all health plans — whether Medicaid, ACA marketplace plans, or employer plans — must cover. These include preventive care (like vaccines and screenings), emergency services, hospitalization, prescription drugs, and mental health care. Medicaid plans must cover these things. ACA marketplace plans must cover these things. The difference is in cost to you, not in what is covered.

Medicaid typically has lower out-of-pocket costs than ACA marketplace plans, especially for people with low incomes. But the specific copays, deductibles, and covered services can vary by state and by the specific plan you choose. If you are comparing options, look at the actual plan documents, not just the name.

What happens if you do not have coverage

The ACA no longer penalizes people for not having health coverage — that penalty ended in 2019. However, if you do not have coverage and you get sick or injured, you will pay the full cost of medical care out of pocket. Unpaid medical bills can lead to debt and collection actions.

If you cannot afford coverage, start by checking whether you may have access to for Medicaid. If you do not, look at ACA marketplace plans and any tax credits you might receive. Some community health centers offer sliding-scale fees based on income if you do not have insurance. The key is to explore what is actually available to you in your state, because the options vary widely.

Frequently Asked Questions

If I have Medicaid, do I also have the ACA?

No. Medicaid is your health coverage. The ACA is the law that created the marketplace and expanded Medicaid in some states, but having Medicaid means you have health coverage through that program, not through an ACA marketplace plan. You do not need both.

Can I switch from Medicaid to an ACA marketplace plan?

Yes, but usually only during the annual open enrollment period in November and December, or if you have a may have access to life event like losing other coverage or moving to a new state. If your income rises above your state's Medicaid limit, you may become may be able to access for an ACA tax credit at that time.

Does the ACA cover people who are not citizens?

Medicaid rules on citizenship vary by state. Some states cover lawful permanent residents; others do not. ACA marketplace plans are available to anyone, but tax credits are limited to citizens and certain immigrants. Check your state's Medicaid office for the specific rules where you live.

What if I live in a state that did not expand Medicaid?

You can still look at ACA marketplace plans at Healthcare.gov. You may may have access to for a tax credit depending on your income. You can also contact your state Medicaid office to confirm the income limits for the categories Medicaid does cover in your state.