Medicaid coverage will expire for millions of Americans in the coming months, which will push many into foreign territory: the health insurance market.
The state will begin cutting people off government-funded plans when they no longer qualify on an income basis, a process it has since halted shortly after the COVID-19 pandemic hit.
This cutting time will vary. But all states have insurance markets where people who lose Medicaid can buy new coverage with the help of subsidies.
Shopping for affordable insurance that covers regular doctors and prescriptions can be daunting, especially in a market that offers dozens of options and subsidies to help pay for it.
Here's what you need to know.
WHAT HAPPENED TO MEDICAID?
Nearly 85 million people are covered by government-funded Medicaid, which focuses on low-income people.
At the start of the COVID-19 pandemic, the federal government prohibited states from removing people from Medicaid if they were no longer eligible. The ban ends this spring, and many people in Medicaid will be introduced to this so-called redefinition process for the first time.
States are already verifying eligibility, with most expected to begin terminating coverage for ineligible persons in May, June and July.
Federal officials estimate that more than 8 million people will lose eligibility and be excluded from Medicaid mainly because their income has changed.
WHERE TO FIND THE NEW COVERAGE
The state health insurance market created under the federal Affordable Care Act is the only place where people can buy individual insurance with help from income-based subsidies. They can be found through the federal government health.gov website.
You can also find coverage for sale outside of these markets, but doing so can be risky. For example, short-term plans may exclude coverage for certain things, such as medical conditions a person had before enrolling.
INCOME BASED SUBSIDY
The cost of any new plan should be one of the first things to consider.
Buyers can get income-based subsidies to help pay for the monthly premiums of the plans they purchase in state markets. Those subsidies were increased during the pandemic.
Many people don't realize they can get this help, says Jeremy Smith, director of the West Virginia health insurance navigator program, which helps shoppers find coverage.
“Most people can qualify for plans starting at $0 per month,” says Smith.
Individual insurance differs from Medicaid in several ways.
Some market plans come with a large deductible that people have to pay before most coverage begins.
So people shopping for coverage should understand the deductibles and other payments they have to make before committing to a plan, says Smith.
Individual insurers also group hospitals and doctors in a network. Insurance may cover less than bills for care received outside the network. Buyers should learn how all regular doctors and medications are covered before enrolling in a new plan.
Individual insurance can also give people more treatment options. Many doctors do not accept Medicaid, and states may only pay for a limited number of prescriptions.
“It's possible that people will have better access to certain services in the marketplace,” said Jennifer Tolbert, a Medicaid expert with the nonprofit Kaiser Family Foundation.
IMPORTANT STEPS IF YOU USE MEDICAID
Make sure your state program has your current contact information — including mailing address, email, and cell phone. They will send a notification if they need more information or if someone is no longer eligible for Medicaid.
“Everyone should be doing it before April,” said Joshua Brooker, an independent broker in Lancaster, Pennsylvania. “This will make for a smoother transition.”
Start shopping for new insurance before Medicaid ends. People should be given a lot of time to sort through the options.
The goal is to have new insurance starting the day after Medicaid ends. That will reduce the temporary loss of coverage for regular physicians or essential drugs.
Once people sign up to shop at the insurance marketplace, they have 60 days to find a plan.
Seeking help may be a good idea, especially for people who need help figuring out their income for the coming year. It is necessary to calculate the subsidy.
There are several ways people can get help.
States will transfer the names and contact information of those who are no longer eligible for Medicaid to their marketplaces. They'll also send Medicaid recipients a letter explaining how to connect to the market, said Kate McEvoy, executive director of the nonprofit National Association of Medicaid Directors.
Federally qualified health centers also have counselors who can help people apply.
Independent brokers also help people sort options. They get paid which usually comes from the premium you end up paying.