Low income: how Medicaid and CHIP work

Two programs, run by states

Medicaid and the Children's Health Insurance Program (CHIP) are the two main public coverage programs for people with limited income. Both are paid for jointly by the federal government and the states. Medicaid.gov explains that each state runs its own programs within federal requirements, which is why the same family could qualify in one state and not in another, and why the programs often go by different names locally.

For the person applying, the practical result is that the state is where decisions are made. Your state Medicaid agency decides applications, sets many of the rules, and is the authority on what your state's program covers. Federal sites such as Medicaid.gov, HealthCare.gov and InsureKidsNow.gov explain the general framework and point you to the right state program.

This pathway describes that framework in plain language. It cannot tell you whether you qualify, because only your state can decide that, and the income limits are set by each state and change over time.

Who Medicaid covers

Medicaid.gov describes Medicaid as covering millions of Americans, including eligible low-income adults, children, pregnant women, older adults and people with disabilities. Federal law requires states to cover certain groups, and lets states choose to cover others.

One of the biggest choices is whether a state has expanded Medicaid to cover adults under 65 based on income alone. In states that have, many adults with low income can qualify whether or not they have children or a disability. In states that have not, adults without children may not qualify for Medicaid at all, however low their income, though they may still be able to get help through the Marketplace. HealthCare.gov's Medicaid pages and the Medicaid.gov state overviews say which approach a state takes.

Medicaid covers a broad range of health services. Some benefits are required in every state; others are optional and vary. Costs to the enrollee are usually low or nothing, though some states charge small amounts for some services.

Who CHIP covers

CHIP provides coverage for uninsured children in families with incomes too high to qualify for Medicaid but who may still struggle to afford private coverage. Medicaid.gov explains that states design their CHIP programs within federal rules: some run CHIP as part of Medicaid, some as a separate program, and some combine the two. In some states, CHIP can also cover pregnant women.

InsureKidsNow.gov is the federal site focused on children's coverage. It explains what Medicaid and CHIP cover for children, including regular checkups, and helps families find their state's program. For many families with working parents, children can qualify for CHIP or Medicaid even when the parents do not qualify for Medicaid themselves.

Why the rules differ by state

Because states run the programs, the following can all differ depending on where you live:

• The income limits for each group, such as children, pregnant women, parents and other adults.
• Whether adults without children can qualify on income alone.
• The optional benefits covered beyond the federal minimums.
• Whether CHIP is part of Medicaid or a separate program, and whether it charges premiums or copayments.
• The name of the program and the agency that runs it.

Medicaid.gov publishes an overview for each state, which is a starting point for finding the state agency and its rules.

How income is counted

For most children, pregnant women, parents and adults under 65, Medicaid and CHIP eligibility is assessed using a method called modified adjusted gross income, the same basic way income is counted for Marketplace savings. Medicaid.gov's eligibility policy pages explain that this method generally looks at taxable income and tax-filing relationships to decide who counts in a household and what income is included.

HealthCare.gov's page "What's included as income" lists the kinds of income to include, such as wages, self-employment income after expenses, and unemployment compensation, and the kinds to leave out. For people whose income changes, the application asks about current monthly income for Medicaid and expected yearly income for Marketplace savings.

Different rules can apply to people aged 65 and older and to people whose eligibility is based on disability or a need for long-term care. Those rules may also consider savings and other assets. The state Medicaid agency can explain which rules apply.

This site does not list income limits in dollars. They depend on household size and the state, and they are updated regularly. The Marketplace application and the state agency apply the current figures.

How to apply

Unlike private plans, Medicaid and CHIP have no enrollment period. HealthCare.gov explains that you can apply any time of year, and if you qualify, coverage can begin immediately. There are two main ways to apply:

1. Directly with your state Medicaid agency. States accept applications online, by mail and in person.
2. Through the Marketplace application on HealthCare.gov or your state's Marketplace. If anyone in the household looks eligible for Medicaid or CHIP, the Marketplace sends the information to the state agency, which contacts you to finish the application.

The application asks about the household, income and current coverage. It may also ask for documents to confirm what you report. If the state finds that you do not qualify for Medicaid, it can pass your application to the Marketplace so you can see whether you qualify for savings on a plan.

Staying covered

Medicaid and CHIP eligibility is checked again from time to time, usually once a year. The state may renew coverage using information it already has, or it may send a renewal form. Keeping your mailing address and contact details up to date with the state agency, and answering renewal letters by the deadline, helps avoid losing coverage by mistake. If you report a change, such as new income or a new household member, the state may check eligibility again.

Losing Medicaid or CHIP eligibility counts as a qualifying event for a Marketplace Special Enrollment Period. The enrollment periods pathway explains the timing.

Questions to take to official help

Your state Medicaid agency decides applications. Marketplace Navigators, listed on HealthCare.gov, help people apply for Medicaid and CHIP at no cost, and InsureKidsNow.gov helps families find their state's children's program.

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