Medicaid coverage will end for millions of Americans in the coming months, pushing many into unfamiliar territory: the health insurance marketplace.
States will begin cutting people out of government-funded plans when they no longer qualify based on income, a process that was halted shortly after the COVID-19 pandemic hit.
The timing of these discounts will vary. But all states have insurance marketplaces where people who lose Medicaid can buy new coverage with subsidies. Some states will even connect buyers with a potential new plan.
Shopping for affordable insurance that covers regular doctors and prescriptions can be daunting, especially in marketplaces that offer dozens of options and subsidies to help pay for them. Experts say it helps to start this search with a plan. Here’s a deeper look at the process.
WHAT HAPPENS TO MEDICAID?
Nearly 85 million people are covered by government-funded Medicaid, which focuses on low-income people.
At the start of the pandemic, the federal government barred states from kicking people off Medicaid if they were no longer eligible. That ban ends this spring, and many people on Medicaid will be put through this so-called redetermination process for the first time.
States are already checking eligibility. Some, such as Arizona, Arkansas and Idaho, are expected to begin ending coverage for ineligibles in April. Most states will do this in May, June, and July.
Federal officials estimate that more than 8 million people will lose eligibility and leave Medicaid, mostly because their incomes have changed.
WHERE TO GET NEW COVERAGE
The state health insurance marketplaces created by the Affordable Care Act are the only places where people can buy individual insurance with an income-based subsidy. These can be found on the federal government’s healthcare.gov website.
Buyers can also find coverage sold outside of these markets, but it can be risky. For example, short-term plans may exclude coverage for certain things, such as a medical condition someone had before enrolling.
INCOME-BASED GRANTS
The cost of any new plan should be one of the first things people consider. Buyers can get income-based subsidies to help pay the monthly premiums of plans they buy on state marketplaces. These subsidies have been increased during the pandemic.
Oftentimes, people don’t realize they can get this help, said Jeremy Smith, director of the West Virginia Health Insurance Navigator program, which helps shoppers find coverage.
“A very large percentage of people can qualify for a plan that starts at $0 per month,” he said.
COVERAGE DIFFERENCES
Individual insurance differs from Medicaid in several ways. Some marketplace plans come with a high deductible that people must pay before most coverage kicks in.
Buyers should understand the deductibles and other payments they’ll have to make before committing to a plan, Smith noted.
Individual insurance also groups hospitals and doctors into networks. Insurance may cover much less of the bill for care received outside those networks. Buyers should learn how common doctors and drugs are covered before enrolling in a new plan.
Individual insurance can give people more options for care. Many doctors do not accept Medicaid, and states can only pay for a limited amount of prescriptions.
“People may have better access to certain services in the marketplace,” said Jennifer Tolbert, a Medicaid expert at the nonprofit Kaiser Family Foundation.
IMPORTANT STEPS IF YOU USE MEDICAID
Make sure your state program has your current contact information, including a mailing address plus email and cell phone. They will send notifications if they need more information or if someone no longer qualifies for Medicaid.
“Everybody should be doing this before April,” said Joshua Brooker, an independent broker based in Lancaster, Pennsylvania. “It will make for a smoother transition.”
Start buying new insurance before Medicaid ends. Buyers should allow plenty of time to sort through the options.
The goal should be to have new insurance starting the day after Medicaid ends. This would reduce temporary coverage losses for regular doctors or important drugs.
Once buyers register to shop the insurance marketplace, they have 60 days to find a plan.
GETTING HELP
Seeking help can be a good idea, especially for people who need help figuring out their income for the coming year. This is necessary to calculate the subsidies.
There are many ways people can get help.
States will transfer the names and contact information of those who no longer qualify for Medicaid in their marketplaces. They will also send a letter to Medicaid beneficiaries telling them how to connect to the marketplace, said Kate McEvoy, executive director of the nonprofit National Association of Medicaid Directors.
Some states will go further. The California marketplace, Covered California, will enroll people in a qualified health plan and send them the information. These individuals must then confirm enrollment and pay the first premium to remain covered.
State markets have navigators like Smith who can help people navigate options and understand potential plans. Government-funded navigators are free to use, but cannot recommend any specific choice.
Federally qualified health centers also have counselors who can help people apply.
Independent brokers also help people submit options. They will get a fee that usually comes from the premium you pay.
