Difference between Medicaid and Obamacare

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Obamacare is a federal law, but it is also often used to refer to individual market health insurance obtained through exchanges . Medicaid is government health insurance for people with limited incomes, and Medicaid expansion is the cornerstone of Obamacare. Because both terms include health insurance, health care reform, and the US federal government, they are sometimes combined. Let's take a look at the differences between Obamacare and Medicaid, including who provides coverage, who is eligible, enrollment periods, how costs are allocated, and more.

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Obamacare / ACA Basics

Obamacare is technically just a nickname for the Affordable Care Act (ACA). It was originally used by opponents of the law in a derogatory sense, but President Obama adopted the terminology in 2012 and has since been used by both opponents and supporters of the ACA.

Obamacare includes:

While Republican lawmakers and the Trump administration have pushed for the abolition of numerous parts of the ACA throughout 2017, the only part of the law that has been repealed is individually mandated punishment . The Tax Reduction and Employment Act, passed in December 2017, abolished the fine for an individual mandate (but not for the individual mandate itself) as of January 2019.

Although the term "Obamacare" technically covers all ACAs, people generally use it to refer to individual market health insurance plans sold on health insurance exchanges . This is how it will be used in the rest of this article when comparing Obamacare and Medicaid.

The most important difference between Medicaid and Obamacare is that Obamacare health plans are offered by private insurance companies, whereas Medicaid is a government program (although it is often administered by private insurance companies that offer managed care services from Medicaid).

Private plans versus Medicaid

Medicaid, the government health insurance program for low-income US residents, is a social security program like SNAP food stamps or temporary assistance for needy families. In 2020, more than 76 million Americans were receiving Medicaid, an increase of 20 million, or 33%, from 2013. This increase is due in large part to the expansion of the Medicaid program under the Affordable Care Act. but also due to the widespread loss of jobs caused by the COVID-19 pandemic.

Obamacare plans, obtained through the health insurance exchange in every state, reach more than 10 million people and are private health plans. They are offered by health insurance companies such as:

  • Anthem
  • Permanent kaiser
  • Molina
  • Cigna
  • Rye

Obamacare health plans are not run by the state, but must comply with various state and federal government regulations.

However, it is worth noting that more than two-thirds of Medicaid members nationwide have Medicaid managed care plans, so they are covered by private insurers that also sell commercial insurance to individuals and businesses. These plans provide Medicaid benefits under a contract with state governments .

This can be confusing and is compounded by the fact that most states do not have Medicaid in their name (for example, Apple Health in Washington DC and BadgerCare Plus in Wisconsin) .

Who gets Medicaid vs. Obamacare

Getting Medicaid is more difficult than getting an Obamacare health plan.

Who can get Obamacare coverage

If you are a legal resident of the US, you can purchase the private Obamacare health plan through your state's ACA health insurance exchange if you are not enrolled in Medicare .

Eligibility : If your income is between 100% and 400% of the Federal Poverty Level (FPL) and you are not eligible for Medicaid, Medicare, or employer-sponsored plans that provide affordable comprehensive coverage , you may be eligible for a subsidy It helps pay for a portion of your monthly health insurance premiums.

Expanded Medicaid Exclusion : In states with Expanded Medicaid, Medicaid is available to people with incomes up to 138% of the poverty line, making the ACA floor qualify for 139% of the poverty line in those states. As of 2021, Medicaid has expanded to 36 states and the District of Columbia, so the lowest level of eligibility for premium subsidies is 139% of the poverty rate in most of the country (mid 2021 in two additional states, Oklahoma and Missouri). . – will also expand Medicaid) .

Who Pays Full Cost : If your income is above 400% of the FPL or below 100% of the FPL, you will not get help paying for health insurance that is traded on Obamacare exchanges. You can still buy the plan, but you will have to pay 100% of the monthly fee yourself.

Legal Immigrants: Please note that in all states, legally present immigrants with incomes below the poverty line are eligible for premium subsidies if they are not eligible for Medicaid due to the five-year Medicaid waiting period for recent immigrants .

California Exception : In California, state funded premium subsidies are available to people with a household income up to 600% of the poverty line .

As of 2021, New Jersey also has state-funded insurance premium subsidies, but these are available in addition to the federal subsidies and apply to the same population of people with incomes up to 400% of the poverty line .

Who can get Medicaid coverage

The eligibility criteria for Medicaid are strict and vary from state to state.

Income Below 138% Poverty Level: The ACA's original goal was for all legal residents with incomes up to 138% of the FPL to receive free Medicaid coverage. However, the Supreme Court decision made it unnecessary for states to comply with this part of the ACA .

Coverage Gap: As of early 2021, 14 states have not expanded Medicaid coverage to this group (as noted above, this number will drop to 12 states by mid-2021 as Missouri and Oklahoma implement Medicaid expansion) . About 2.3 million people in 13 of these states are in what 's called the coverage gap :

  • Their income is below the FPL and therefore too low for Obamacare subsidies.
  • But they are not eligible for Medicaid either.

Wisconsin has managed to avoid the coverage gap even though Medicaid has not expanded. The state has not expanded Medicaid, but does provide Medicaid to residents with incomes below the poverty line .

Who is eligible : If you live in a state with extended Medicaid coverage , you are eligible for Medicaid if your Modified Adjusted Gross Income does not exceed 138% of the FPL.

This Medicaid insurance is generally free to you, although some states charge a small monthly fee to cover people above the poverty line .

If you live in a state without extended Medicaid coverage , you will need to meet the older and more stringent eligibility criteria. They vary from state to state, but include:

  • Low income criteria
  • You belong to at least one vulnerable group (elderly, disabled, blind, children, pregnant women, and parents or adults who care for young children)

Example

Say that you:

  • Childless
  • No disability
  • 30-year-old man
  • Earn $ 10,000 per year

Whether you are eligible for Medicaid depends on the state you live in.

Enhanced Medicaid Status – meets income criteria (below 138% FPL)

Extended Medicaid-Free Status: You are not eligible (due to the coverage gap) because you are not in a vulnerable group. Unfortunately, you will not have coverage (and therefore will not be eligible for Medicaid or the exchange premium) because your income is below the poverty line.

Differences in terms of accreditation

If you are eligible for Medicaid , you can participate for one year.

However, enrollment in Obamacare plans is only available to:

Unless you have a suitable life event that triggers a special enrollment period, you will have to wait until the next open enrollment period to apply for Obamacare. This is true whether you sign up through an exchange or outside of it; Out-of-market basic individual / family health plans are also ACA compliant and have the same limited enrollment periods.

When coverage begins

When you apply for the Obamacare plan during open enrollment (each fall from November 1 through December 15 in most states), your coverage will not go into effect until January 1 of the following year.

For example, if you enroll in an Obamacare plan during open enrollment in Fall 2021, your Obamacare coverage will be effective on January 1, 2022. Your effective date may be different if you apply due to an event . qualifying , like the birth of a child .

However, there is no waiting period when you are on Medicaid. The insurance is effective immediately.

Retroactive coating differences

Insurance plans sold through Obamacare are generally never retroactive, meaning that you cannot get coverage for anything before your coverage start date (there are some exceptions, including coverage for a newborn or newly adopted child , and government exchanges may also suggest retroactive coverage dates during special enrollment periods such as Maryland during the COVID-related Special Enrollment Period) .

Medicaid coverage may be retroactive depending on your circumstances and where you live.

For example, if you are five months pregnant applying for and receiving Medicaid coverage, Medicaid can pay for the prenatal care you received during the first four months of your pregnancy, even before you applied for Medicaid.

The Trump administration has approved waiver requests from some states that want to end retroactive Medicaid coverage, but most states still offer retroactive Medicaid coverage .

Without retroactive coverage, Medicaid is a bit more like private health insurance in terms of when coverage might take effect. However, coverage generally takes effect on the first day of the month you applied for, as opposed to the first day of the following month, so coverage may take effect a few weeks later, depending on your enrollment date.

Differences in cost allocation

In most cases, Medicaid does not require significant additional benefits, coinsurance, or deductibles .

Because Medicaid is designed for people with very low incomes, anything that is not a conditionally small portion of the cost will be out of reach for Medicaid recipients and will become a potential barrier to health care.

On the other hand, Obamacare health insurance plans often include substantial deductibles, copays, and coinsurance.

Since it can be difficult for people with modest incomes to pay a deductible of a few thousand dollars, a cost-sharing subsidy is available to reduce these costs if you earn less than 250% of the FPL.

If you earn more than 250% of the FPL, you are solely responsible for any cost sharing required by your Obamacare health plan.

Combining coverage with Medicare

It is perfectly legal and beneficial to have Medicare and Medicaid coverage at the same time if you are eligible for both. In fact, there is even a name for people who have both: double rights .

However, there is generally no benefit to having an Obamacare and Medicare health plan.

It is illegal for a private insurance company to sell you an Individual Market Plan after you are enrolled in Medicare, but it is legal to sell an Individual Market Plan (public or off-market) to someone who is eligible for Medicare but not It is registered. .

Also, the insurer cannot force you to drop an Obamacare plan you already have when you become eligible for Medicare.

In this case, however, you will lose any premium subsidy you receive as soon as you are eligible for Medicare (assuming you are eligible for free Medicare Part A, which is often the case) and there is no coordination of benefits. between Medicare and a separate market .

In general, it is recommended that you drop your individual Obamacare coverage if you are eligible for Medicare. This process is not automatic; you must initiate the termination of your Obamacare plan yourself and coordinate it with the beginning of your Medicare coverage.

This is true whether you are enrolled in the original Medicare Parts A and B plan or the Medicare Advantage Plan (Part C).

Talking about the difference

When it comes to Medicaid and Obamacare, knowing who provides your health coverage can be confusing, especially in certain circumstances.

Apply for ACA, get Medicaid

You may not know that you are eligible for Medicaid until you complete your application for health insurance through the ACA health insurance exchange in your state.

If the exchange determines that you are eligible for Medicaid, it will forward this information to the state Medicaid office, which begins the Medicaid application process.

Since you submitted your initial application for health insurance to the Obamacare Health Insurance Exchange, you may be surprised that you end up receiving Medicaid instead of the Obamacare Private Plan. However, this is a normal part of the process.

Medicaid through private companies

Although Medicaid is a government program, most states provide Medicaid services for most members through a private health insurance company .

If you get a Medicaid ID card from UnitedHealthcare, Humana, Kaiser, or Blue Cross, you may wrongly assume that you are getting private health insurance from Obamacare, when in reality it is just the company your state has contracted for Medicaid benefits.

Although Medicaid is administered by a private company, the benefits remain Medicaid and the money to pay for these benefits ultimately comes from federal and state taxpayer funds.

Subtle differences

Most people who buy Obamacare health insurance receive subsidies from the federal government to pay for it, so it may not be clear why publicly subsidized private health insurance (Obamacare) is actually so different from public health insurance. funded by the Medicaid program.

Get the word of drug information

If you have questions about who gives you health coverage and why, or about specific aspects of your coverage, look for the contact information on your insurance card or documents. The agency or company should be able to provide you with the information you need.

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