Medicaid is a joint federal and state program that pays for medical care for people with low income

Medicaid is not one national program with one set of rules. Each state runs its own Medicaid program within federal guidelines, which means the income limits, covered services, and enrollment process differ depending on where you live. The federal government sets a floor — states cannot be more restrictive than that — but most states have added their own rules on top.

To receive Medicaid, you must meet your state's income and resource limits. Income limits vary widely: some states cover people earning up to 138% of the federal poverty line, while others stop at 100% or lower. Your state also looks at your liquid assets — savings, checking accounts, and similar holdings — and sets a maximum you can have and still may have access to. Medicaid does not count your home or car as resources in most cases.

Once you meet income and resource requirements, you must also be in a category Medicaid covers. The main categories are children, pregnant people, parents of dependent children, people over 65, and people with disabilities. Some states have expanded Medicaid to cover more working-age adults, but not all have.

Key Takeaways

  • Medicaid rules are set by your state, not the federal government, so income limits and covered services change based on where you live.
  • You must meet both an income limit and a resource limit (the amount of savings you can have), and you must fall into a category your state covers.
  • Medicaid covers doctor visits, hospital care, prescription drugs, and preventive services, but what else it covers depends on your state.
  • You apply through your state's Medicaid office or health department, and the process and timeline vary by state.
  • If your income or circumstances change, you must report the change to Medicaid within 30 days in most states.

Income and resource limits vary by state and category

Your state publishes its current income limits on its Medicaid website, usually under a section called "Income Limits" or "may be able to access." These limits are expressed as a percentage of the federal poverty line. For 2024, the federal poverty line for a single person is roughly $15,000 per year, but your state may cover people earning up to 138% of that amount or may set a lower threshold.

Resource limits — the total amount of money and liquid assets you can own — are separate from income limits. Most states allow a single person to have $2,000 in countable resources and a couple to have $3,000, though some states have higher limits. Your home, one vehicle, and personal belongings do not count. Retirement accounts like IRAs and 401(k)s usually do not count either, but you should verify this with your state because rules vary.

If you are over 65 or have a disability, your state may use different rules. Some states have separate Medicaid programs for seniors and people with disabilities with different income and resource limits. Check your state's website or call your local Medicaid office to find the limits that apply to you.

What Medicaid covers depends on your state

All state Medicaid programs must cover certain core services: doctor visits, hospital stays, lab tests, X-rays, preventive care, and family planning. Most also cover prescription drugs, mental health services, and dental care for children. Beyond that, coverage varies. Some states cover dental care for adults; others do not. Some cover vision care; others limit it to children. Some cover physical therapy; others require a doctor's referral first.

Your state publishes a list of covered services, usually called a "State Plan" or "Benefits Guide," on its Medicaid website. If you are unsure whether a specific service is covered, call your state's Medicaid office or ask your doctor's office to check before you receive the service. Once you are enrolled, you will receive a handbook or card that lists your benefits.

How to apply for Medicaid in your state

You apply through your state's Medicaid office, which is usually part of the state health department or human services agency. Most states now allow you to apply online through their Medicaid website. Some also accept applications by mail, phone, or in person at a local office. Your state's Medicaid website will list all the ways you can apply and where to send your application.

When you apply, you will need to provide proof of income (recent pay stubs, tax returns, or a letter from your employer), proof of identity (driver's license or passport), and proof of citizenship or immigration status. If you have a disability, you may need medical records. Your state will tell you exactly what documents to bring or upload.

Processing time varies by state. Some states make a decision within two weeks; others take 30 to 45 days. If your application is incomplete, your state will send you a notice asking for more information. You usually have 10 to 30 days to respond before your application is denied. If you are denied, you have the right to request a hearing to appeal the decision.

Reporting changes to your income or household

Medicaid requires you to report changes in your income, household size, address, or other circumstances within 30 days in most states. If you get a job, lose a job, get married, have a baby, or move, you must notify your state's Medicaid office. Failure to report can result in your benefits being terminated or you being asked to repay money Medicaid paid on your behalf.

You can report changes online through your state's Medicaid portal, by phone, by mail, or in person. Your state's website will show you how to report and where to send the information. Keep a record of when you reported the change and how you reported it, in case there is a dispute later.

Medicaid renewal and recertification

Your Medicaid coverage is not permanent. Most states require you to renew your Medicaid every 12 months. Your state will send you a renewal form in the mail or notify you that you can renew online. You must complete the renewal and return it by the deadline or your coverage will end.

During renewal, your state will verify that you still meet the income and resource limits and that you are still in a category Medicaid covers. If your circumstances have changed, this is when your state will discover it. If you do not respond to a renewal notice, your coverage will be terminated, and you will have to reapply to get it back.

What happens if you earn too much income

If your income rises above your state's limit, you will lose Medicaid coverage. However, some states have programs that let you keep partial coverage or transition to a different program. For example, if you get a job and your income exceeds the Medicaid limit, you may be able to buy into a state health plan at a reduced rate, or you may be directed to the federal health insurance marketplace to purchase a plan with a subsidy.

When you report a job or income increase to Medicaid, ask your caseworker what other options are available to you. Do not assume you will lose all coverage. Some states also have "work incentive" programs for people with disabilities that allow them to earn more money and keep Medicaid.

Frequently Asked Questions

Does Medicaid cover dental and vision care?

Medicaid must cover dental and vision care for children in all states. For adults, coverage varies by state. Some states cover routine dental cleanings and eye exams for adults; others cover only emergency dental care or do not cover dental at all. Check your state's benefits guide or call your Medicaid office to find out what is covered where you live.

Can I have Medicaid and Medicare at the same time?

Yes. People over 65 or with certain disabilities can may have access to for both. When you have both, Medicare is your primary insurance and Medicaid is secondary. Medicaid may help pay Medicare premiums and cover services Medicare does not cover. You are called "dual may be able to access" in this situation.

What is the difference between Medicaid and the ACA marketplace?

Medicaid is for people with low income and is run by your state. The ACA marketplace is for people who do not have employer insurance and is run by the federal government. If your income is below your state's Medicaid limit, you should apply for Medicaid first because it is usually free or very low cost. If you earn too much for Medicaid, you can buy a plan on the marketplace and may receive a subsidy to lower your premium.

What if I move to a different state?

Your Medicaid coverage ends when you move. You must apply for Medicaid in your new state using that state's rules and income limits. Some states process applications faster than others, so there may be a gap in coverage. Apply as soon as you move to minimize the gap. If you have ongoing medical needs, ask your current provider for copies of your medical records to bring to your new state.

Can I lose Medicaid if I do not use it?

No. Medicaid does not end just because you do not use it. However, you must still complete your annual renewal and report any changes in income or household. If you do not respond to a renewal notice, your coverage will end even if you have not used it.