For the unknowing, Medicaid is an “entitlement program” that provides health care for people with low incomes, limited resources, or certain disabilities.
The concept of Medicaid came about so that the government could provide assistance to financially-strapped families to help them pay of a portion of their medical bills.
It is often described as a “means-tested” program — where applicants are screened for their eligibility and because it is an entitlement program, everyone who is eligible has a right to enroll in Medicaid coverage.
For many poor and low-income children and families — the group who are least likely to be insured, Medicaid is the only available source of free health insurance coverage.
What is Medicaid? #
Medicaid is essentially a state as well as federal scheme, wherein states and federal government jointly fund it, while the state authorities manage it. Its primary goal is to assist low income families to pay their medical bills.
This scheme was introduced in the year 1995 and since then, it has been helping the poor get medical benefits that they wouldn’t have been able to afford without it.
Each state operates its own Medicaid program within federal guidelines — each with a different income level required to qualify for the same, higher in some and lower in others.
Who is eligible for Medicaid? #
Before the ACA, Medicaid served only children, parents, pregnant women, people with disabilities and seniors; it’s now available to any adult, between the ages of 19 and 65, with income below the predetermined threshold.
The Affordable Care Act (widely known as “Obamacare”) creates a national minimum eligibility standard of 138% of the federal poverty level (FPL), but some states choose not to adopt the Medicaid expansion under the ACA.
Eleven (11) states — most of them in the Deep South — have refused to expand Medicaid, leaving some of their poorest residents without health care.
Among those states not currently expanding Medicaid, the average eligibility threshold remains very low at 50% or about $12,430 for a single mother of two, with only two (2) states — Tennessee, and Wisconsin covering parents with incomes at or near poverty.
What is the highest income to qualify for Medicaid? #
The federal poverty level (FPL) income numbers below are used to determine eligibility for various income-based public programs, such as Medicaid, health insurance premium tax credits, and cost-sharing reductions.
|48 Contiguous States||100%||138%||400%|
* Income limits are higher in Alaska and Hawaii due to the higher cost of living.
If your state is expanding Medicaid, you’ll probably qualify for Medicaid coverage, if your income is below $34,310 for a family of three. See this chart for income limits for different family sizes.
If your state hasn’t expanded Medicaid, you may be eligible for subsidies to buy a private health insurance plan in the Marketplace, if your income is between 100% – 400% of the federal poverty line. That’s an income between $24,860 and $99,440 for a family of three.
One of those subsidies for those who buy insurance through Marketplace is the Advance Premium Tax Credit (APTC) which can be applied directly to your premium — the amount you pay each month to your insurance plan.
How does the premium tax credit work? #
When you apply for coverage in the Health Insurance Marketplace, the Marketplace will estimate the amount of the premium tax credit that you may be eligible, based on your income.
Based upon that estimate, you can decide if you want to have all, some, or none of your estimated credit paid in advance directly to your insurance company to lower your monthly premiums.
If you do not opt for advance credit payments, you may be eligible to claim the credit when you file your taxes for the year, which will lower the amount of taxes owed on that return.
Is there a penalty if I don't buy health insurance? #
Regardless of whether or not your state has expanded Medicaid, you are required by law to have minimum health insurance coverage or
else pay a tax penalty — the greater of $695 per adult (or $347.50 per child under 18) or 2.5% of your income.
Starting with the 2019 plan year (for which you’ll file taxes by July 15, 2020), this penalty no longer applies.
However, some states have their own individual health insurance mandate, so it’s a good idea to check with your state or tax preparer to find out if there is a fee for not having health coverage.
How do I apply for Medicaid? #
To find out if you and your family qualify for Medicaid, CHIP, or a private insurance plan, create a Marketplace account online at HealthCare.gov — the official health insurance marketplace. If your state runs its own Marketplace, it’ll take you there.
The last day to enroll for 2024 coverage is December 15, 2023. Coverage begins January 1, 2024. If you don’t enroll in a plan by December 15, you can’t get 2024 coverage unless you qualify for a Special Enrollment Period.
First, you’ll provide some information about you and your family, including your income, household size, and more. Be sure to have all of the documentation ready before you submit your Medicaid application.
Next you’ll see all the plans and programs you’re eligible for and compare them side-by-side. You’ll also find out if you can get lower costs on monthly premiums and out-of-pocket costs.
Choose the plan that meets your needs and enroll. If applicable, pay your premium to your insurance company. Coverage starts as soon as January 1st the following year.
You may call 24/7 Marketplace helpline at 1-800-318-2596 for specific information about enrolling in Medicaid, eligibility, coverage and services for your state.
Can I get free health insurance if I'm unemployed? #
If you’ve collected unemployment benefits at any point in 2021, you could be eligible for free or (or nearly free) coverage through the Affordable Care Act marketplace, with significant federal subsidies that could help lower premiums to as little as $0 per month.
You may sign up for the subsidized coverage on HealthCare.gov. The window will be open through Aug. 15 and savings will run for the rest of the year.