“Here’s what you need to know…” style=”default”]
- Medicaid is a program that provides health insurance to certain Americans at little or no cost.
- Medicaid eligibility requirements vary by state.
- Most requirements are based on income.
- With the passage of ObamaCare, many states expanded their Medicaid programs.
One component of ObamaCare, or the Affordable Care Act, was the expansion of Medicaid. As of the early part of 2016, 32 states (to include the District of Columbia) have or are currently expanding their Medicaid program. In general, this means that more low-income families can qualify to receive free or low-cost health coverage through Medicaid. People who do not qualify for Medicaid may benefit from some government assistance as they buy a plan on the Marketplace. If you have a limited budget and are looking for insurance, you should compare your options in terms of coverage, premiums, co-pays, and deductibles. Enter your zip code in our FREE tool above to compare health insurance rates instantly!
The Medicaid Basics
Each state runs its own Medicaid program. Mandatory benefits that they must all include:
- Inpatient and outpatient hospital services
- screening and diagnostic services
- Nursing facility services
- Home health services
- Physician services
- Lab and X-ray services
- Family planning assistance
- Transportation to and from medical care
There are optional benefits that some plans can cover, including:
- Prescription drugs
- Physical and occupational therapy
- Vision and dental care
- Hospice care
Coverage for Children
Most children in low-income families are eligible to receive health care benefits through the Children’s Health Insurance Program (CHIP). CHIP and Medicaid are related programs, and ObamaCare extended funding to CHIP through 2019.
A four-person household making:
- $41,700 or less receives free CHIP coverage
- $70,650 or less pays a small cost for coverage
- over $70,650 pays the full cost of coverage</li>
When to Apply
Unlike the plans offered through the Marketplace, Medicaid can be applied for at any time of year. You can either apply directly through your state program or while you’re filling out an application through the Marketplace. If you have filled out an application through the Marketplace during the open enrollment period and are found to qualify for Medicaid, you’ll be notified by the appropriate authorities.
- Signing up for Medicaid could save you between $100 and $400 a month, depending on what type of insurance you choose.
- The open enrollment period for 2016 is November 1, 2015 – January 31, 2016. In the future, it may be October 1 – December 15 in the year leading up to the one in which you’d like coverage.
- Parents can apply for CHIP, on behalf of their children, at any time.
Income Qualifications
If your income is 138% of the federal poverty level, you may qualify for Medicaid in states which have expanded Medicaid. This level is adjusted for household size. In 2014 the following were at the 138% level:
- A 1-person household: $16,105
- A 2-person household: $21,707
- A 3-person household: $27,310
- A 4-person household: $32,913
In states that did not expand Medicaid in recent years, the income threshold is much lower. It varies by state, and the median income cut-off is 48% of the federal poverty level.
States with Expanded Medicaid Coverage
26 states have expanded Medicaid or are currently expanding it. They are:
- Alaska
- California
- Oregon
- Washington
- Nevada
- Arizona
- New Mexico
- Colorado
- North Dakota
- Minnesota
- Illinois
- Louisiana
- Kentucky
- Ohio
- West Virginia
- Pennsylvania
- New York
- Vermont
- Massachusetts
- Connecticut
- Rhode Island
- New Jersey
- Delaware
- DC
- Maryland
- Hawaii
Six more are expanding Medicaid using an alternative program:
- Montana
- Iowa
- Michigan
- Indiana
- Arkansas
- New Hampshire
Cost Assistance
If you make less than four times the federal poverty level, you may qualify to receive government subsidies or tax credits to help with your out-of-pocket costs. This is only the case if you do not qualify for Medicaid.
Subsidies reduce your out-of-pocket costs and cap the amount of medical payments you’re responsible for in a given year. They apply to people making between 100% and 250% of the federal poverty level and have signed up for a silver plan through the Marketplace.
Tax credits can be paid directly to your insurer to lower your monthly premium. You can also choose to pay the full cost of your premium and claim a tax credit.
Credits are available to people with incomes at 100% to 400% of the federal poverty level.
There are a lot of variables at play when you start accounting for cost assistance, so you need to spend some time researching your options to figure out which type of plan may be most affordable.
The Medicaid Gap
In states that have not expanded Medicaid, there may be a gap in terms of affordable insurance options. This is because the subsidies are usually only available to people who make at least 100% of the federal poverty level.
Someone making 50% of the federal poverty level may not qualify for Medicaid and also may not qualify for subsidies, making the cost of insurance potentially too expensive.
The Uninsured
If you have an affordable option and do not obtain health insurance, you will be subject to a fine. This can be:
- 2.5% of your taxable income, not to exceed the average cost of a yearly premium for a bronze Marketplace plan
- $695 for each uninsured adult and $347.50 for each uninsured child under 18, not to exceed $2085
Exemptions
You can apply for an exemption to the fine if you faced certain hardships. They include:
- Being homeless
- Facing domestic violence
- Facing eviction or foreclosure
- Filing for bankruptcy
- Dealing with the death of a family member
- Incurring substantial debt from medical costs
While ObamaCare did expand Medicaid coverage, 16 states did not adopt the new guidelines. In states which did expand their program, most people qualify for Medicaid if their annual income is 138% or less of the federal poverty level. In states which did not expand their program, that threshold could be around 50%, making affordable insurance options difficult to obtain. To determine if there is an ideal insurance plan for you, you can compare several different policies to see which ones could fit with your budget and provide you with adequate coverage. Compare health insurance rates now by using our FREE tool above!