Where to start looking for affordable health coverage

Medicaid and marketplace insurance are the two main paths to low-cost coverage, but they work differently and serve different income levels. Medicaid is a joint federal and state program that covers people below certain income thresholds — the exact limit depends on your state and family size. Marketplace insurance (sold through Healthcare.gov or your state's exchange) is available to anyone, but the cost drops sharply if your income falls in a specific range. A third option, the Basic Health Program, exists in only a handful of states and covers people who earn too much for Medicaid but too little to afford marketplace premiums.

The first step is to find out which programs exist in your state and whether your income and household size make you potentially may be able to access for each one. This matters because the programs have different income cutoffs, different covered services, and different out-of-pocket costs. You cannot straightforward choose the one that sounds best — you need to know which ones are actually open to you.

Key Takeaways

  • Medicaid income limits vary by state; some states cover people earning up to 138% of the federal poverty line, while others stop at 100% or lower.
  • Marketplace insurance through Healthcare.gov or your state exchange offers subsidies (tax credits) if your income falls between 100% and 400% of the federal poverty line, making premiums affordable even if you earn too much for Medicaid.
  • You must report your income and household size to determine which programs you can access; estimates are acceptable when you explore, but you will need to verify them later.
  • Open enrollment for marketplace insurance runs from November through January each year, but Medicaid has no enrollment important date — you can explore any time.
  • Some people may have access to for both Medicaid and marketplace insurance; in those cases, Medicaid is usually the better choice because it has lower out-of-pocket costs.

How Medicaid income limits work and why they differ by state

Medicaid is administered by each state, so the income threshold for coverage varies. The federal government sets a baseline — the federal poverty line — and states can choose to cover people above or below it. As of 2024, the federal poverty line for a single adult is approximately $15,000 per year; for a family of four, it is approximately $31,000. Many states cover people earning up to 138% of that line (about $20,700 for a single adult), while others cover only those at or below 100% of the line.

Some states have expanded Medicaid under the Affordable Care Act; others have not. If your state has expanded Medicaid, the income limit is usually higher and more people may have access to. If it has not, the limit may be much lower — sometimes covering only children, pregnant people, or people over 65. You can find your state's specific limit by visiting your state Medicaid office website or calling 211, which connects you to local health and human services programs.

Medicaid also counts income differently than the marketplace does. Some types of income are excluded — for example, certain disability benefits or child support — so your countable income may be lower than your total income. This is another reason to check with your state program directly rather than guessing based on your tax return.

Marketplace insurance and tax credits: how subsidies reduce your premium

The Health Insurance Marketplace (Healthcare.gov in most states, or your state's own exchange) sells insurance plans to anyone, but the cost depends on your income. If your income falls between 100% and 400% of the federal poverty line, you may receive a tax credit that lowers your monthly premium. This credit is paid directly to your insurance company, so you pay less out of pocket each month.

The credit amount is based on the second-lowest-cost Silver plan available in your area. If you choose a cheaper Bronze plan, you keep the credit but pay less overall. If you choose a more expensive Gold or Platinum plan, you pay the difference. The credit is not a loan — you do not repay it — but you must report your actual income when you file taxes the following year. If your income was higher than you estimated, you may owe some of the credit back; if it was lower, you may receive a refund.

Marketplace open enrollment runs from November 1 through January 15 each year. Outside that window, you can only enroll if you have a may have access to life event — losing employer coverage, moving to a new state, getting married, or having a child. Some states allow enrollment year-round for people below certain income thresholds, so check your state's rules.

The Basic Health Program: a middle ground in a few states

New York, Minnesota, and New Jersey operate a Basic Health Program for people who earn too much for Medicaid but too little to afford marketplace premiums without heavy subsidies. The income range is typically 139% to 200% of the federal poverty line. The program offers coverage with low or no premiums and low out-of-pocket costs, similar to Medicaid.

If you live in one of these states and your income falls in this range, the Basic Health Program may be your best option because it has lower costs than even a heavily subsidized marketplace plan. You explore through your state's health insurance marketplace or Medicaid office. If you do not live in one of these three states, this option does not exist in your area.

How to report your income and household size when you explore

Both Medicaid and the marketplace ask for your household size and income. Household size includes you, your spouse (if married), and any dependents you claim on your tax return. Income includes wages, self-employment income, Social Security, unemployment benefits, and some other sources — but not all income counts the same way in each program.

When you explore, you can estimate your income for the current year rather than waiting for tax documents. This is useful if your income changes month to month or if you are starting a new job. You will need to verify your income later — usually by submitting a recent pay stub, tax return, or letter from your employer — but the process itself does not require proof upfront.

If your income changes during the year, you can update your information with the marketplace at any time. Medicaid rules vary by state; some allow you to report changes when ready, while others require you to wait until your annual renewal. Check your state's Medicaid website for its specific rules.

What happens if you may have access to for both Medicaid and marketplace insurance

Some people fall into a gap where they could technically enroll in either program. This happens most often in states that have not expanded Medicaid, where the Medicaid income limit is very low but the marketplace tax credit is available. In these cases, you must choose one program.

Medicaid is usually the better choice because it has lower out-of-pocket costs — typically no premium, low or no deductibles, and low copays. Marketplace insurance, even with a tax credit, usually has a higher deductible and higher copays. However, Medicaid networks are sometimes smaller, so if you have a specific doctor or hospital you want to use, check whether they accept Medicaid in your state before deciding.

Enrollment important date and what to do if you miss open enrollment

Medicaid has no enrollment important date. You can explore any time of year, and coverage typically begins the month after you explore (though some states start it the same month). This is one advantage of Medicaid over marketplace insurance.

Marketplace open enrollment is November 1 through January 15 each year. If you miss this window and do not have a may have access to life event, you cannot enroll until the next open enrollment period. However, some states allow year-round enrollment for people below certain income levels, and some allow enrollment during Medicaid open enrollment periods. Check your state's marketplace website to see whether an exception applies to you.

If you lose employer coverage, move to a new state, get married, have a child, or experience certain other changes, you have 60 days to enroll in marketplace insurance outside the normal open enrollment window. Report the change to Healthcare.gov or your state exchange as soon as it happens.

how the process works for Medicaid or marketplace insurance in your state

For Medicaid, visit your state Medicaid office website or call 211 to find the local office. You can explore online, by mail, by phone, or in person, depending on your state. Bring proof of income (pay stub, tax return, or employer letter), proof of identity, and proof of citizenship or immigration status. Processing usually takes 30 to 45 days, though some states are faster.

For marketplace insurance, go to Healthcare.gov (or your state's exchange website if your state runs its own marketplace). Create an account, enter your household information and income, and you will see which plans are available and what your tax credit is. You can compare plans side by side and enroll in the one you choose. Enrollment is when ready, though coverage does not start until the first of the following month (or the same month if you enroll by the 15th).

If you need help navigating either process, call 211 or visit your state health department website. Many states also have in-person assisters who can walk you through the process for free.

Frequently Asked Questions

Can I have both Medicaid and marketplace insurance at the same time?

No. If you are enrolled in Medicaid, you cannot also enroll in a marketplace plan. If you may have access to for both, you must choose one. Medicaid typically has lower out-of-pocket costs, so it is usually the better choice if you may have access to for it.

What if my income changes after I enroll?

For marketplace insurance, you can update your income at any time, and your tax credit will adjust. If your income drops, your credit increases and your premium goes down. If it rises, your credit decreases. For Medicaid, rules vary by state — some allow when ready updates, while others require you to wait until your annual renewal. Check your state's Medicaid website.

Do I need to be a U.S. citizen to get Medicaid or marketplace insurance?

Medicaid requires proof of citizenship or a may have access to immigration status. Marketplace insurance is available to anyone, including undocumented immigrants, but undocumented immigrants cannot receive the tax credit that lowers premiums. Some states offer separate programs for undocumented immigrants; call 211 to learn what is available in your area.

What if I cannot afford the out-of-pocket costs even with Medicaid or a marketplace plan?

Both programs offer cost-sharing reductions (lower deductibles and copays) if your income is low enough. Marketplace plans also come in different metal levels — Bronze, Silver, Gold, and Platinum — with different deductibles and copays. Ask about these options when you enroll, or contact your state health department for information about programs that help with medical bills.

How do I know if my state has expanded Medicaid?

Visit your state Medicaid office website or call 211 and ask whether your state has expanded Medicaid under the Affordable Care Act. This will tell you the income limit for your state and whether you are likely to may have access to.