What You Need to Know
If you lose your Medicaid eligibility, you qualify for a Special Enrollment Period for a subsidized ACA plan.
Short-term health insurance also offers temporary stop-gap coverage.
You could also reapply for Medicaid although time limits apply.
Medicaid is a program that provides health insurance coverage for certain low-income individuals and families. Each state administers its own Medicaid program.
It’s possible to qualify for Medicaid at one point, then lose that coverage later. Reasons you might be dropped from Medicaid coverage include:
- making too much income;
- a failure to report a change in family status (getting married, for example);
- your pregnancy ending;
- receiving a gift or an inheritance; or
- moving to a state with different income limits.
If you’re in one of these situations and have lost Medicaid coverage, you have options.
Affordable Care Act (ACA) Subsidized Plans After Medicaid
Special Enrollment Status: If you lose your Medicaid health coverage, a Special Enrollment Period (SEP) opens up for you. During an (SEP), you can obtain full-featured health insurance known as an Affordable Care Act (or Obamacare) plan.
The SEP is only a 60-day window, so you have to act quickly. Tools like HealthCare.com help you determine which plan is best for your needs and budget.
Without a Special Enrollment Period, you can enroll in a health plan only during the annual Open Enrollment Period, which generally lasts from November 1 through December 15. Once the window closes, you will be unable to enroll in healthcare coverage until the next open enrollment period.
For example, if your Medicaid is canceled as of March 1, you will have 60 days (until May 1) to enroll in a health plan through Obamacare. If you don’t enroll by the end of that 60-day window, you will have to wait until the next open enrollment period, and the coverage would not be effective until January 1 of the following year.
If you know when your Medicaid plan ends, you can sign up in advance. Health insurance plans are generally effective the first day of the following month after you apply, but a new application may take some time to process.
ACA Discounts for Low and Moderate Incomes: The cost of health insurance premiums can be intimidating, but help is available. Depending on your income level, you might receive a subsidy for ACA coverage.
Subsidies can range from 0 percent to 100 percent of the cost of the monthly premium. Unfortunately, you could fall into the Medicaid gap, where you have Medicaid denied for some reason, but you don’t make enough income to qualify for subsidies under Obamacare. As of September 2020, 12 states had not expanded Medicaid as specified under the Affordable Care Act, leaving residents vulnerable to a coverage gap between Medicaid eligibility and ACA subsidies.
Though the Medicaid gap is a possibility, don’t allow the sticker price of health insurance premiums to prevent you from finding out if you might receive a health insurance premium discount from the federal government.
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Short-Term Health Coverage After Medicaid
An unexpected loss of health insurance coverage can put you and your family in a very difficult situation. If you lost Medicaid coverage and need something to fill the gap, short-term health coverage is an option.
Short-term plans are meant to be temporary. They do not meet the minimum essential requirements mandated by Obamacare. Therefore, if you don’t eventually switch to a different health insurance coverage, you could find yourself facing a tax penalty in certain states.
What to Expect With Short-Term Health Plans: These plans allow you to visit the emergency room, see your primary care physician, and go to a specialist if you need to.
Problems arise, however, if you have health conditions that existed before you obtained the short-term policy. Services for those conditions are unlikely to be covered by your short-term health insurance plan. Some common conditions that will not be covered include arthritis, asthma and diabetes.
If you are in a bind, short-term health coverage can help you get over the hump until you find a more permanent option.
Restrictions on Short-Term Plans: If you have significant preexisting conditions, temporary plans might not be an option for you. Though Obamacare does not allow preexisting conditions to be considered by health insurers, that rule does not apply to short-term health plans.
If you do obtain a short-term policy, federal rules limit their duration to 364 days. Individual states may limit them to shorter periods, but you can generally keep returning to short-term plans.
Reapply for Medicaid
Medicaid is great if you’re able to keep it. Though eligibility requirements vary by state, those who typically qualify for Medicaid include low-income families, pregnant women, children, the elderly, and those with certain disabilities. The program is funded through a partnership between federal and state governments.
A Medicaid denial letter or a loss of Medicaid coverage does not mean that you have no options. The reasons you might have Medicaid rejected or terminated vary, so it’s important to review the information included in the letter you receive. The agency reviewing your Medicaid application might determine that you have too many assets, that you are not disabled or that you simply failed to include required supporting documentation with your application.
Time Limits to Appeal: No matter what reason is provided for the denial of your Medicaid, states are required to provide you with an opportunity to appeal the decision. If you do happen to receive a denial letter, you must submit your appeal no more than 90 days after the date of the denial letter. Applying for Medicaid occurs at the state level, so you will need to follow the procedures provided by your state. It may be useful to submit the appeal in person and in writing and have it date-stamped.
Special Enrollment for Employer Insurance: If you were waiting for your Medicaid to expire before joining your employer’s health insurance plan, you’re in luck. Contact your company’s healthcare coordinator without delay. If you act quickly, you should be able to enroll around the time your Medicaid ends.
Review Your Options and Stay Covered
Losing Medicaid coverage can be very scary and shocking at first, especially if you have ongoing health issues.
If you are dealing with losing Medicaid, remember that it is not the end of the road. You have multiple options. Keep both your healthcare needs and budget in mind when making a decision about how to move forward. And if you end up at the hospital without insurance coverage, there are options even in that situation.
No matter what path you choose to follow once you’re denied Medicaid or you are dropped from Medicaid, the most important thing to do is to obtain some type of coverage. The physical and financial safety that you get from having health insurance can end up being well worth any cost.
What are additional resources for people who have lost Medicaid?
– Your state Medicaid office.
– Healthcare.gov or your state Marketplace for questions about Affordable Care Act (ACA) subsidized health plans.
– If you need routine care, look into community health clinics. One resource is the National Association of Free and Charitable Clinics.
– If you end up in the ER with no insurance, hospitals are required to treat you under law. If you are hospitalized for something other than an emergency, you may be able to negotiate financial assistance or “charity care.” Ask to speak to the hospital’s ombudsman.
– If you are over 50, reach out to the AARP office in your state.
– If you are 65 or older, contact Medicare. Other options include the Medicare Rights Center or the Center for Medicare Advocacy.
– Check if your state government has an ombudsman for health care.
What are other options for people who lost Medicaid?
If you lose Medicaid eligibility you are eligible for a special enrollment period (SEP) for “Obamacare.” You have 60 days from the date you lose Medicaid to apply. Depending on your income level, you may be eligible for premium and other subsidies.
You may qualify immediately for federally subsidized and comprehensive ACA plans with $10 monthly premiums – or less. President Biden’s American Rescue Plan signed into law in March greatly expanded eligibility as well as ACA subsidies for 2021 and 2022. For example, if you are earning too much for Medicaid, while still bringing in less than 150% of the federal poverty level ($32,940 for family of three), you may now be eligible for a zero-premium plan.
If you intend to reapply for Medicaid, or think you’ll have the option of other insurance in the future, consider enrolling in a short-term plan. These provide up to 364 days of coverage; while they cover ER, PCP and specialist visits, they don’t cover everything a “qualified” plan under Obamacare must cover. In addition, they typically do no cover preexisting health conditions, such as arthritis, asthma and diabetes.
If you qualify for unemployment compensation at any time this year, you can apply for an ACA plan with subsidized premiums and generous cost-sharing – benefits usually reserved for those earning up 133% of poverty.
If you’re over 65, check with Medicare to see if you qualify for that government program. You may be among the 12 million who are eligible for Medicaid and Medicare at the same time.
If you’ve been laid off and are eligible for health coverage through COBRA, the government will pay your entire premiums through September 30, 2021.
What do you do an appeal is denied?
Read the denial document very carefully.
If the denial is based on faulty facts, you could reach out to the resources and organizations mentioned above, especially the Center for Medicare Advocacy. In addition, there are Medicaid specialists and elder lawyers all across the country who will consult with you and advise you about your next steps, including their fees.
What if you aged out of Medicaid?
If your state rules you’re ineligible for Medicaid before you turn 26, you can apply immediately for a subsidized ACA plan. Alternatives include applying for a health plan where you work or through your parent’s health insurance.
What if you end up at the hospital without insurance?
If you end up in the ER with no insurance, hospitals are required to treat you under law. If you are hospitalized for something other than an emergency, you may be able to negotiate financial assistance or “charity care.” Ask to speak to the hospital’s ombudsman.