Obamacare and Medicaid are not the same program, but they work together

The Affordable Care Act (ACA), commonly called Obamacare, is a federal law passed in 2010 that changed how health insurance works in the United States. Medicaid is a separate program that existed before the ACA and continues to operate under it. The ACA expanded Medicaid in many states, which is why people often confuse them—but they are different programs with different rules, different income limits, and different ways you enroll.

The key difference: Medicaid is a needs-based program run by states. The ACA created new ways to buy private insurance and expanded Medicaid's reach. If you are uninsured, you may be steered toward one or the other depending on your income and which state you live in. Understanding which one you might use matters because the enrollment process, coverage, and costs are not the same.

Key Takeaways

  • Medicaid is a state-run program for people with low income; the ACA is a federal law that expanded Medicaid and created new insurance marketplaces.
  • In states that expanded Medicaid, adults earning up to roughly 138 percent of the federal poverty line may be covered by Medicaid; in non-expansion states, the limit is much lower and varies by state.
  • If your income is above Medicaid limits in your state, you can buy private insurance through the ACA marketplace, sometimes with tax credits that lower your monthly cost.
  • You enroll in Medicaid through your state health department or social services office; you enroll in ACA marketplace plans through Healthcare.gov or your state's marketplace website.
  • Medicaid is free or very low-cost; ACA marketplace plans have monthly premiums, though subsidies may reduce what you pay.

What the ACA actually did to Medicaid

The ACA gave states the option to expand their Medicaid programs to cover more adults. Before 2014, Medicaid mostly covered children, pregnant women, elderly people, and people with disabilities. The ACA said states could extend Medicaid to all adults earning up to 138 percent of the federal poverty line—roughly $20,000 per year for a single person in 2024, though this amount changes annually.

Not all states took that option. As of 2024, about 40 states have expanded Medicaid; about 10 have not. In expansion states, if your income is low enough, you are automatically steered toward Medicaid. In non-expansion states, the income cutoff is much lower—sometimes as low as 50 percent of the poverty line—and you may not be covered by Medicaid at all even if you have very little income. That is when the ACA marketplace becomes your option.

The ACA also created the Health Insurance Marketplace, a place where you can buy private insurance plans. If you do not may have access to for Medicaid in your state, you can shop for plans on Healthcare.gov (or your state's own marketplace). Depending on your income, you may receive a tax credit that reduces your monthly premium, or a cost-sharing reduction that lowers your deductible and copays.

Income limits and how they differ by state

Medicaid income limits depend entirely on your state. In expansion states, the limit is roughly 138 percent of the federal poverty line. In 2024, that means a single person can earn about $20,000 per year and still be covered. A family of three can earn about $42,000. These numbers change each year as the poverty line is adjusted.

In non-expansion states, the limit is lower and varies widely. Some states cover only people earning 50 percent of the poverty line; others go up to 100 percent. You need to check your specific state's rules. Your state health department website or a 211 call can tell you the exact limit where you live.

If your income is above your state's Medicaid limit, you can buy an ACA marketplace plan. If your income is between 100 and 400 percent of the federal poverty line, you may receive a tax credit that lowers your monthly premium. Above 400 percent, you pay full price but can still buy a plan.

How enrollment works for each program

Medicaid enrollment happens through your state. You contact your state health department, social services office, or Medicaid agency directly. Some states let you apply online; others require you to mail a form or apply in person. The process varies by state, so start by searching "[your state] Medicaid application" or calling 211 for the local office number.

ACA marketplace enrollment happens on Healthcare.gov or your state's marketplace website. You create an account, enter your income and household size, and see which plans are available to you. You can enroll during the annual open enrollment period (usually November 1 to January 15) or during a special enrollment period if you have had a life change like losing a job or moving.

If you are unsure which program you may have access to for, start with your state Medicaid office. They will tell you whether you meet the income limit. If you do not, they will direct you to the marketplace. You cannot be enrolled in both Medicaid and an ACA marketplace plan at the same time.

What you pay under each program

Medicaid is free or very low-cost. Most people pay nothing for coverage. Some states charge small copays for doctor visits or prescriptions—usually $1 to $5—but many states waive copays for people with the lowest incomes. There is no monthly premium.

ACA marketplace plans have a monthly premium. The amount depends on the plan you choose and your age. If your income qualifies you for a tax credit, the credit is applied to your premium, and you pay the difference. For example, if a plan costs $400 per month and your tax credit is $350, you pay $50. If your income is very low, the tax credit may cover the entire premium, and you pay nothing.

Both programs cover the same basic services: doctor visits, hospital care, prescriptions, and preventive care. The difference is cost and how you pay. Medicaid is simpler financially; marketplace plans require you to manage a monthly bill, though subsidies can make that bill very small.

Which program you should look into first

If you are uninsured and have low income, check Medicaid first. It is simpler, cheaper, and faster to enroll in most cases. Call your state Medicaid office or search online for your state's application. Have your income information and Social Security number ready.

If your state has not expanded Medicaid and your income is above your state's limit, or if you apply and are denied, then look at the ACA marketplace. Go to Healthcare.gov and enter your information. You will see which plans are available and what your tax credit would be. You can compare plans side by side and enroll online.

If you are not sure which state you live in or which program to start with, call 211. They can tell you your state's Medicaid rules and direct you to the right office or website.

Frequently Asked Questions

Can I use Obamacare if I am on Medicaid?

No. You cannot be enrolled in both programs at the same time. If you are on Medicaid and your income increases above the limit, you will be disenrolled from Medicaid and can then enroll in an ACA marketplace plan. Your state will notify you when this happens.

Does the ACA marketplace cost more than Medicaid?

It can. Medicaid is free or very low-cost; marketplace plans have monthly premiums. However, if your income is low, you may receive a tax credit that covers most or all of the premium. Compare the actual cost to you—premium plus deductible—before deciding.

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

You may not be covered by Medicaid even if you have very low income. In that case, the ACA marketplace is your main option. Depending on your income, you may receive a tax credit that makes a marketplace plan affordable. Call 211 or visit Healthcare.gov to see what plans are available to you.

Do I have to enroll during a specific time?

For Medicaid, you can apply anytime. For ACA marketplace plans, you can enroll during open enrollment (usually November 1 to January 15) or if you have a may have access to life event like losing health coverage, moving, or having a baby. Outside those windows, you cannot enroll in a marketplace plan.

How do I know if I may have access to for a tax credit on the marketplace?

Go to Healthcare.gov and enter your income and household size. The website will calculate your tax credit automatically. If your income is between 100 and 400 percent of the federal poverty line, you likely may have access to. The credit is applied to your monthly premium when you enroll.