Haris Ashley
Texas has not expanded Medicaid under the ACA, resulting in a coverage gap in the state. This means that an estimated 617,000 people who earn less than the poverty level are not eligible for Medicaid and do not qualify for subsidies in the Marketplace. Texas residents can transition from Marketplace to Medicaid or CHIP, but they must end their Marketplace coverage to avoid repaying premium tax credits. If a person has qualifying health coverage through Medicaid, they no longer qualify for premium tax credits or extra savings on their Marketplace plan.
| Characteristics | Values |
|---|---|
| Texas Medicaid under the ACA | Texas has not expanded Medicaid under the ACA |
| Coverage gap in Texas | An estimated 617,000 people are in the coverage gap |
| Reasons for the gap | People earn less than the poverty level and are not eligible for Medicaid due to the lack of Medicaid expansion in Texas |
| Premium subsidies and cost-sharing reductions | Available in Texas, and can make Gold plans cheaper than Silver plans |
| Rate review | As of 2023, the Texas Department of Insurance handles rate review for individual/family health plans |
| Enrollment in 2024 | Nearly 3.5 million Texas residents enrolled during the open enrollment period |
| Switching from Marketplace to Medicaid | If you don't end your Marketplace coverage when Medicaid starts, you may have to pay back some or all of the premium tax credit |
| Medicaid as qualifying health coverage | If your Medicaid program counts as qualifying health coverage, you no longer qualify for the premium tax credit or extra savings on your Marketplace plan |
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What You'll Learn
Texas ACA Health Insurance Marketplace
Texas uses the federally facilitated health insurance exchange (marketplace) HealthCare.gov, for residents to purchase its ACA Marketplace plans. The ACA Marketplace provides access to health insurance products from numerous private insurers. Coverage areas differ between insurers; most areas of the state have plans available from multiple insurers, but there are some counties in north-central Texas where only a single insurer offers Marketplace coverage.
Depending on your income and circumstances, you may be eligible for financial assistance to reduce your monthly insurance premium and out-of-pocket expenses. To qualify for financial assistance, you must not have access to affordable health coverage provided by an employer, and you must not be eligible for Medicaid, CHIP, or premium-free Medicare Part A. Texas has a tool to help you determine if you qualify for premium subsidies in the Marketplace if your employer offers coverage but you find it too expensive.
To enrol in an ACA Marketplace plan in Texas, you can visit HealthCare.gov, the Texas health insurance marketplace. You can also purchase individual and family health coverage with the help of an insurance agent or broker, a Navigator or certified application counsellor, or an approved enhanced direct enrolment entity. You can get a quote from a licensed third-party agency, or call HealthCare.gov’s contact centre.
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Texas Medicaid eligibility
Texas has not expanded its Medicaid program to cover more people. Texas Medicaid is a healthcare program for low-income individuals of all ages. There are three categories of Medicaid long-term care programs with different eligibility requirements. Texas offers multiple pathways towards eligibility, and the financial criteria change annually and vary with marital status.
In 2025, a single Medicaid Nursing Home applicant in Texas must meet the following criteria:
- Income under $2,901 per month
- Assets under $2,000
- Require a Nursing Home Level of Care
Texas has a 5-year Medicaid Look-Back Period for Nursing Home Medicaid and Medicaid Waivers. During this period, the state scrutinizes all asset transfers to ensure no assets were gifted or sold under fair market value. If so, a Penalty Period of Medicaid ineligibility will be calculated.
For Nursing Home Medicaid and Medicaid Waivers, a Nursing Facility Level of Care (NFLC) is required. Certain benefits may have additional eligibility requirements. For example, to receive a waiver to pay for home modifications, an individual might need to prove that they are unable to safely live at home without modifications.
Texas also offers CHIP (Children's Health Insurance Program) plans, and STAR Kids benefits are available to young people aged 20 and below who have disabilities or complex health needs and are covered by Medicaid.
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Switching from Marketplace to Medicaid
Step 1: Check Eligibility
Before initiating the switch, it is crucial to determine your eligibility for Medicaid. The criteria for qualifying for Medicaid vary from state to state, with some states expanding their Medicaid programs to cover more people. Research and understand the specific income and residency requirements for your state to ensure you meet the necessary qualifications.
Step 2: Understand the Impact on Coverage and Costs
When you transition from Marketplace insurance to Medicaid, there will be changes in the cost structure of your health insurance. With Medicaid, you can expect to benefit from low-cost or, in some cases, no-cost health coverage. This is because, with Medicaid, you no longer qualify for the premium tax credit or extra savings associated with your Marketplace plan. Ensure you thoroughly understand the out-of-pocket costs, deductibles, copayments, and coinsurance associated with your Medicaid coverage.
Step 3: End Your Marketplace Coverage
Once you are certain about your eligibility for Medicaid and understand the cost implications, it is important to end your Marketplace coverage. Timing is crucial here. Wait until you receive a final decision from your state agency confirming your eligibility for Medicaid. If you end your Marketplace coverage prematurely, you may encounter a gap in your insurance coverage. Remember to cancel your Marketplace plan when your Medicaid coverage starts to avoid potential complications and overlap in coverage.
Step 4: Understand Tax Implications
If you received advance premium tax credits while having Marketplace coverage and Medicaid simultaneously, you may need to pay back those credits. Consult with a tax specialist or refer to relevant tax publications to understand your specific circumstances and obligations. Self-employed individuals, in particular, may have different considerations when it comes to tax deductions and should seek appropriate advice.
Step 5: Enroll in Medicaid
After ending your Marketplace coverage, you can proceed to enroll in Medicaid. Contact your state agency to initiate the enrollment process and provide any necessary documentation to confirm your eligibility. Each state has its own application process, so ensure you follow the specific guidelines for your state to ensure a smooth transition to Medicaid.
Remember, it is essential to be diligent and patient throughout the process. The transition from Marketplace insurance to Medicaid can provide you with access to affordable healthcare, but it requires careful consideration of your specific circumstances and adherence to important timing considerations.
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Premium tax credits
The Premium Tax Credit is a refundable credit that helps eligible individuals and families afford health insurance purchased through the Health Insurance Marketplace. To be eligible for the premium tax credit, individuals must be U.S. citizens or lawfully present in the United States. They cannot receive a premium tax credit if they are eligible for other "minimum essential coverage," including Medicare, Medicaid, CHIP, or employer-sponsored coverage that is considered adequate and affordable.
The amount of the premium tax credit is based on a sliding scale, with generally greater credit amounts available to those with lower household incomes. For tax years 2021 and 2022, the American Rescue Plan of 2021 (ARPA) temporarily expanded eligibility for the premium tax credit by eliminating the rule that a taxpayer is not allowed a premium tax credit if their household income is above 400% of the Federal Poverty Line. However, for tax years other than 2021 and 2022, if your household income on your tax return is more than 400% of the federal poverty line for your family size, you are not allowed a premium tax credit and will have to repay all of the advance credit payments.
Certain changes to your household, income, or family size may affect the amount of your premium tax credit. These changes can alter your tax refund or cause you to owe tax. It is important to report these changes promptly to ensure you receive the proper type and amount of financial assistance. For example, if you receive advance payments of the premium tax credit and then receive an offer of employer coverage that is considered affordable and adequate, you should report this change to the ACA marketplace.
To apply for the Premium Tax Credit, individuals can apply through the ACA marketplace online, by mail, or in person. Applicants need to provide information on their income, household members, how they file their taxes, and whether they have an offer of health coverage through their job. Based on this information, the ACA marketplace determines whether members of the household are eligible for a premium tax credit or other health care programs like Medicaid.
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Medicaid expansion in Texas
Texas is one of 12 states that have not expanded Medicaid under the Affordable Care Act. A 2020 Episcopal Health Foundation survey found that 69% of Texans support expanding Medicaid to provide health insurance to more low-income uninsured Texans. This is an increase from 64% in 2019. Texans with low incomes (82%), those who self-reported fair/poor health (82%), and uninsured adults under 65 (80%) were among those with the highest percentage supporting Medicaid expansion.
Texas has the highest uninsured rate in the country. 35% of Texans under 65 say they don't have health insurance. 7% of Texans said they lost health insurance in 2020 due to the COVID-19 pandemic. Despite this, a majority (73%) of Texans were unaware that their state's uninsured rate was higher than that of other states.
The Episcopal Health Foundation survey also found that 57% of Texans want the state to increase spending on healthcare. Texans only ranked increased spending on public education (67%) as a higher priority. Majorities of Texans said that top health priorities for the state legislature should be lowering prescription drug costs (63%), lowering healthcare costs (60%), reducing maternal mortality (58%), increasing access to health insurance (57%), and increasing access to hospitals for people in rural areas (54%).
Medicaid expansion could help Texas address its high uninsured rate and improve access to healthcare for low-income residents. By expanding Medicaid, Texas could also increase access to healthcare for those who need it the most, such as those in rural areas.
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Frequently asked questions
Medicaid is an insurance program that provides low-cost health coverage to individuals who earn too much money to qualify for regular benefits but not enough to buy private insurance.
Yes, Texas has Medicaid. However, Texas has not expanded Medicaid under the ACA, so there is a coverage gap in the state. An estimated 617,000 people are in this gap, earning below the poverty line but not qualifying for Medicaid or subsidies in the Marketplace.
If you have qualifying health coverage through Medicaid, you no longer qualify for the premium tax credit or extra savings on your Marketplace plan. You must end your Marketplace coverage when Medicaid coverage starts, or you may have to pay back the premium tax credit when you file your federal taxes.
Marketplace insurance plans are offered by private insurers, whereas Medicaid is a government-funded program for individuals who cannot afford private insurance.
