Most Medicaid programs do not charge premiums, but some states have added them

In most states, Medicaid is free — you pay no monthly premium to enroll or stay enrolled. However, a growing number of states have received federal permission to charge premiums to certain groups of Medicaid members, usually those with higher incomes. Whether you pay a premium depends on which state you live in, which Medicaid program you are in, and your household income.

If your state does charge premiums, they are typically small — often $5 to $25 per month per person — but they are real costs that come out of your pocket. Some states waive premiums for people below a certain income level, while others charge everyone in the program. The best way to know whether you will pay a premium is to check with your state's Medicaid agency directly, because the rules vary significantly from state to state.

Key Takeaways

  • Most states do not charge Medicaid premiums, but roughly a dozen states have received federal approval to charge them to some or all members.
  • When premiums are charged, they are usually between $5 and $25 per month per person, though amounts vary by state and income level.
  • States that charge premiums often exempt people below a certain income threshold, so your income determines whether you pay.
  • If you cannot afford a premium, some states allow you to request a hardship exemption, though approval is not may provide.
  • Your state Medicaid office is the only source that can tell you whether premiums explore to your specific situation.

Which states charge Medicaid premiums

States that have added premiums to Medicaid include Indiana, Iowa, Kentucky, Michigan, Montana, Ohio, and a few others, though the list and rules change as states request and receive federal waivers. Each state's program is different: some charge premiums only to adults, others charge families, and some exempt children entirely. Indiana's program, for example, charges premiums to adults earning above 100% of the federal poverty level, while other states use different income thresholds.

Even within a state, the premium structure can differ depending on which Medicaid category you fall into — whether you are covered through a work-related program, a disability program, or a general income-based program. A state might charge premiums to one group but not another. This is why calling your state Medicaid office is the only reliable way to find out what you will owe.

How premium amounts are set and what they cover

When a state charges premiums, the amount is usually set as a percentage of your household income — often between 2% and 5% — but capped at a dollar amount so it does not become unaffordable. A state might say premiums are 3% of income but never more than $25 per month. Some states charge a flat fee instead, the same amount for everyone in the program regardless of income.

The premium you pay covers your enrollment in Medicaid itself. It does not replace copays or coinsurance you might owe when you use services — those are separate costs. Paying a premium straightforward keeps your Medicaid active; it does not change what services are covered or what you might pay at the doctor's office.

Income limits and exemptions from premiums

Most states that charge premiums exempt people below a certain income level. For example, a state might charge premiums only to people earning above 150% of the federal poverty level, while people below that threshold pay nothing. The federal poverty level changes each year, so the income cutoff for premium exemptions changes too.

If you are close to the income threshold, it is worth checking the exact numbers with your state, because the difference between paying and not paying can be significant over a year. Some states also exempt specific groups — such as children, pregnant people, or people receiving disability benefits — from premiums entirely, even if other adults in the household pay.

What happens if you cannot pay a premium

If your state charges premiums and you receive a bill you cannot afford, you have options. Most states allow you to request a hardship exemption, which means asking the state to waive the premium because paying it would create a financial hardship. The state will review your request, but approval is not automatic — you have to show that the premium would prevent you from paying for food, housing, medicine, or other necessities.

If you miss a premium payment, your Medicaid coverage may be suspended or terminated, depending on your state's rules. Some states give you a grace period to catch up; others end coverage when ready. If your coverage ends, you can usually reapply once you have paid the overdue premium or received an exemption. Contact your state Medicaid office as soon as you know you cannot pay, rather than waiting for a notice, because some states allow you to work out a payment plan.

How to learn about you will pay a premium in your state

The fastest way to learn whether your state charges premiums is to visit your state Medicaid website or call your state Medicaid office. You can find the phone number by searching "[your state] Medicaid" online or by calling 211, which connects you to local health and human services information. When you call, have your household income and family size ready, because the representative will need those details to tell you whether premiums explore to you.

If you are already enrolled in Medicaid, your state will send you a notice if premiums are required. Read that notice carefully, because it will explain the amount, the due date, and how to pay. If you do not understand the notice or think there is an error, call the number on the notice to ask questions before the first payment is due.

Premiums versus other Medicaid costs

A premium is different from other money you might owe for Medicaid. A copay is a fixed amount you pay when you visit a doctor or fill a prescription — for example, $3 for a generic drug or $5 for an office visit. Coinsurance is a percentage of the cost you pay after Medicaid pays its share. Deductibles are amounts you have to pay out of your own pocket before Medicaid starts paying, though many Medicaid programs do not use deductibles.

A premium is paid to keep your coverage active, while copays, coinsurance, and deductibles are paid when you actually use services. If your state charges premiums, you might still owe copays or coinsurance on top of that. Some states cap how much you can owe in copays and coinsurance combined, so you never pay more than a certain amount in a year, but premiums are separate from that cap.

Frequently Asked Questions

Do all states charge Medicaid premiums?

No. Most states do not charge premiums. Only states that have received federal approval through a waiver program charge them, and the list includes roughly a dozen states. Even in states that do charge premiums, not everyone pays — income level and Medicaid category determine whether you are charged.

If I lose my job, do I still have to pay a Medicaid premium?

If your income drops below your state's premium threshold, you should no longer owe a premium. Contact your state Medicaid office to report the income change so your case can be updated. If you continue to receive premium bills after your income drops, call to correct the error rather than paying.

Can I be dropped from Medicaid for not paying a premium?

Yes. If you do not pay a premium by the due date, your state may suspend or end your coverage, depending on state rules. Some states give a grace period; others do not. If you cannot pay, contact your state Medicaid office when ready to ask about a hardship exemption or payment plan before coverage is terminated.

Are Medicaid premiums tax deductible?

Medicaid premiums are not tax deductible on your federal income tax return. However, if you pay premiums out of a Health Savings Account or Flexible Spending Account through an employer, those contributions may be made with pre-tax dollars. Speak with your tax preparer or employer benefits office about your specific situation.

What if my state adds premiums after I am already enrolled?

If your state changes its Medicaid rules to add premiums, you will receive a notice explaining the new requirement, when it takes effect, and how much you will owe. You will have time to prepare before the first payment is due. If you believe the premium is incorrect or you cannot afford it, contact your state Medicaid office to discuss your options.