Medicaid is the United States government’s health insurance program for people with low incomes. It’s a joint federal and state program, meaning the federal government sets a floor of rules and contributes a large share of the funding, while each state administers its own version and can expand benefits beyond the federal minimum. The result is a program that’s huge in scale, covering more than 90 million people at any given time, but that works differently depending on where you live. What you’re entitled to in Texas is not what you’d receive in Massachusetts, and whether you qualify at all can depend heavily on which state you call home.
Medicaid covers a comprehensive set of health services including doctor visits, hospital care, emergency services, prescription drugs, mental health and substance use treatment, prenatal care, pediatric services, and in many states long-term care including nursing home coverage. Most people enrolled in Medicaid pay little to nothing in premiums, deductibles, or copays. For qualifying households, it’s often the most comprehensive and affordable health coverage available anywhere in the system. The problem is that millions of people who qualify aren’t enrolled, usually because they assume they earn too much or don’t know how to apply.
How the ACA Changed Who Qualifies
Before the Affordable Care Act, Medicaid eligibility was categorical. You had to belong to a specific group: children, pregnant women, parents of dependent children, people with disabilities, or elderly individuals meeting income and asset tests. An adult without children, without a disability, and under 65 almost certainly didn’t qualify for Medicaid in most states, regardless of how little they earned. That left a significant gap in coverage for low-income adults who didn’t fit into an eligible category.
The ACA created Medicaid expansion, which allowed states to extend eligibility to nearly all adults with household income at or below 138% of the federal poverty level, regardless of family composition or disability status. The federal government pays at least 90% of the costs for expansion-eligible adults, making it financially advantageous for states to participate. As of 2025, 41 states and the District of Columbia have adopted expansion. Ten states have not.
In the states that haven’t expanded Medicaid, the coverage gap the ACA created is real and painful. Marketplace premium tax credits begin at 100% of FPL, but traditional Medicaid in non-expansion states might only cover adults with income below 50% or even 25% of FPL. That means adults with incomes between 0% and 100% of FPL in non-expansion states don’t qualify for Medicaid and don’t qualify for marketplace subsidies. They fall into a coverage gap with no good affordable options. If you live in one of those states and your income is very low, understanding your state’s specific Medicaid rules is essential, because the situation varies more than most people realize.
Income Eligibility: The Specific Numbers
In expansion states, the income threshold for most non-elderly adults is 138% of the federal poverty level. For 2025, 138% of FPL is approximately $20,780 per year for a single individual and about $43,056 for a family of four. If your household income is at or below those levels, and you live in an expansion state, you’re almost certainly eligible for Medicaid regardless of whether you have children, a disability, or any other categorical qualification. You just need to meet the income test and be a lawfully present resident.
Income for Medicaid purposes is measured as Modified Adjusted Gross Income, the same MAGI figure used for ACA marketplace subsidy calculations. It includes wages, self-employment income, Social Security benefits (to the extent they’re included in taxable income), investment income, rental income, and most other income sources. Some things that might feel like income, such as gifts from family or proceeds from selling personal property, may not count. The Medicaid agency can tell you exactly what does and doesn’t count toward your specific income calculation.
For people whose incomes fluctuate, Medicaid can be gained and lost throughout the year. If your income drops below the threshold in the middle of the year, you can apply and get covered promptly, usually within the month you applied. If your income rises above the threshold, you’d eventually become ineligible and would need to transition to marketplace coverage. The system is designed to handle these transitions, though in practice they can create gaps if you’re not attentive to your coverage status when your income changes.
Who Qualifies Beyond the Expansion Income Rules
Children qualify for Medicaid under broader rules than adults in all states. Federal law requires states to cover children up to at least 133% of FPL, and most states extend Medicaid or CHIP coverage for children to significantly higher income levels. Children’s coverage under Medicaid and CHIP is discussed in detail in a separate article, but the short version is that if your children are uninsured and your family income is below 200% to 300% of FPL depending on your state, they’re almost certainly eligible for one of these programs at little or no cost.
Pregnant women qualify for Medicaid in all states, generally up to at least 138% of FPL. Many states extend Medicaid coverage for pregnant women to higher income thresholds, recognizing the significant healthcare needs and costs of pregnancy. Federal law now requires states to provide 12 months of continuous postpartum Medicaid coverage following delivery, meaning women who qualify during pregnancy don’t lose coverage immediately after giving birth. This extension was a significant policy change designed to address the United States’ troubling maternal mortality rates.
People receiving Supplemental Security Income (SSI) benefits due to disability are automatically eligible for Medicaid in most states, often without needing to complete a separate Medicaid application. The elderly and people with disabilities may also qualify for Medicaid through separate eligibility pathways that involve both income and asset tests. For this population, Medicaid is particularly critical because it covers long-term care services that Medicare doesn’t, including nursing home care and home health services for people who need ongoing assistance with daily living activities.
What Medicaid Covers
Federal law requires all state Medicaid programs to cover a core set of services. These mandatory benefits include inpatient and outpatient hospital services, physician services, laboratory and x-ray services, family planning services and supplies, federally qualified health center and rural health clinic services, early and periodic screening for children (a comprehensive preventive care standard), nurse midwife services, and transportation to medical appointments. That’s the floor. States can and do cover much more.
Most states also cover prescription drugs, though the specific drugs covered and any prior authorization requirements vary by state and managed care plan. Dental care for adults is covered in some states but not others. Vision care and eyeglasses are covered in many states. Mental health and substance use disorder treatment are covered under federal parity requirements. Physical therapy and other rehabilitation services are typically available. The specific benefits your state’s Medicaid program provides are spelled out in the state plan, and your state Medicaid agency’s website should list covered services clearly.
Long-term care is where Medicaid’s coverage becomes uniquely important. Medicare covers short-term skilled nursing facility care after a qualifying hospital stay, but it doesn’t cover custodial nursing home care for people who simply can’t live independently anymore. Medicaid does, for people who meet income and asset eligibility rules for long-term care. Medicaid also funds home- and community-based services in most states, including personal care aides, adult day programs, and other supports that allow elderly and disabled people to remain in their homes rather than entering nursing facilities. For millions of elderly Americans, Medicaid is the only thing standing between them and catastrophic nursing home bills that would exhaust any assets they have within months.
How Managed Care Works in Medicaid
Most Medicaid enrollees receive their benefits through Medicaid managed care organizations, which are private health plans contracted by the state to deliver Medicaid services. The state pays the MCO a fixed amount per enrollee per month, and the MCO manages your care through its network of doctors, hospitals, and specialists. In most states with managed care, you choose from a small list of available MCOs when you enroll, or you’re assigned to one automatically if you don’t make a choice.
Network adequacy in Medicaid managed care can be a challenge. Not every provider accepts Medicaid, partly because reimbursement rates are lower than commercial insurance or Medicare, and partly because some practices find the administrative requirements burdensome. When you enroll, verify that your preferred primary care doctor and any specialists you need are in-network with your assigned MCO. If they’re not, you may need to either switch MCOs (if a switch is available) or find new providers within the network. This is particularly important for people with ongoing specialist relationships, such as oncology patients or people managing complex chronic conditions.
Costs: What You’ll Actually Pay
For the vast majority of Medicaid enrollees, there are no monthly premiums. Some states charge modest premiums to adults above certain income levels within the Medicaid eligibility range, but those premiums are small compared to any private insurance option. Federal law prohibits premiums for children, pregnant women, and most other mandatory eligibility groups.
Copays may apply for some services in some states, such as non-emergency use of the emergency room, certain prescription categories, or outpatient visits. Federal law caps allowable copays at modest levels and prohibits any cost-sharing for emergency services, preventive care for children, family planning services, and pregnancy-related services. Federal law also caps total out-of-pocket spending for Medicaid enrollees at 5% of household income, which means even in states with cost-sharing, your total annual exposure is limited.
In practical terms, Medicaid is almost always the best financial option for people who qualify. If you’re eligible for both Medicaid and a marketplace plan, Medicaid covers more for less, typically much less. The marketplace application process is designed to detect Medicaid eligibility and route you to the state program automatically, so you don’t need to apply separately. If you think you might qualify, apply and let the system figure out which program you belong in.
How to Apply
You can apply for Medicaid at any time of year. There’s no open enrollment window like there is for the marketplace. If your income drops below the eligibility threshold tomorrow, you can apply tomorrow and get covered, typically within days to a few weeks depending on your state’s processing time.
Applications can be submitted online through your state’s Medicaid agency website, through HealthCare.gov (which routes Medicaid-eligible applicants to the state program), by phone through the state Medicaid hotline, or in person at local Medicaid offices and in many cases at Federally Qualified Health Centers and hospitals. You’ll need to provide basic documentation: proof of identity, proof of income (pay stubs, a recent tax return, or employer verification), proof of state residency, and proof of citizenship or eligible immigration status. Some states have simplified documentation requirements to reduce barriers to enrollment.
Some states offer presumptive eligibility, which allows certain qualified entities like hospitals, clinics, and community organizations to make a quick preliminary eligibility determination so that coverage can begin immediately while the full application is being processed. This is particularly important for people who need care urgently and can’t wait weeks for coverage to begin. If you need care right away, ask the hospital or clinic whether they can conduct a presumptive eligibility determination while your full application is pending.
What Medicaid Actually Is, Plainly Speaking
Medicaid gets mislabeled as welfare in political discussions in a way that obscures what it actually is: health insurance funded by taxpayers for people whose incomes don’t allow them to afford private coverage. If you qualify, using it isn’t a moral failing or a sign of dependency. It’s using a benefit you’re entitled to that exists for a very clear public purpose. Uninsured people still get sick and still need care. When they can’t pay for it, that cost gets shifted elsewhere. Medicaid pays for care in an organized, cost-efficient way that’s better for the individual, better for providers, and better for the broader healthcare system than leaving people uninsured.
If you’re uninsured, if your income has dropped recently, if you’ve lost a job or reduced your hours, or if you’ve never checked whether you qualify, check now. It takes 15 minutes to fill out an application. Many people who go through the process discover they’ve been eligible for months or years without knowing it. Healthcare you can actually access and afford is worth the 15 minutes.