Paul Sanchez
Medicaid is health coverage provided by states to people with very low or no income. However, since the COVID-19 pandemic, things may have changed for some people, including where they live, work, and how much they earn. As a result, some people may no longer be eligible for Medicaid but can instead opt for employer-provided health insurance coverage. This type of health insurance is offered by an employer to their employees, as well as to employees' spouses or partners and dependents. It can go a long way toward protecting your financial stability and peace of mind.
| Characteristics | Values |
|---|---|
| Medicaid Redetermination | The government is restarting the yearly process of making sure people on Medicaid are still qualified for these programs. |
| COVID-19 | Since the pandemic, things may have changed for people, including where they live, work, and how much they earn. |
| Medicaid Coverage | Some people may lose their Medicaid coverage, but they have other options, such as getting health insurance from their employer. |
| Employer-Provided Coverage | Employer-provided coverage can help protect financial stability and peace of mind. |
| Losing Medicaid Eligibility | Employees typically have 60 days to request an SEP after losing Medicaid coverage. |
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What You'll Learn
- Medicaid Redetermination: The government checks if you still qualify
- Employer-provided coverage: You can get health insurance through your job
- Cost: Employer insurance may be cheaper with shared costs
- Medicare: You may be eligible for government health insurance
- Marketplace plans: You may qualify for savings on a Marketplace plan
Medicaid Redetermination: The government checks if you still qualify
Medicaid Redetermination, also known as Medicaid renewal, recertification, or unwinding, is the process of checking whether a person is still eligible for Medicaid or the Children's Health Insurance Program (CHIP) coverage. The eligibility criteria are based on financial and other factors set by the state. To qualify for Medicaid, a person's income must be fairly low, and a yearly process helps the state decide if someone still meets the criteria. The redetermination process applies to all Medicaid beneficiaries and is typically done once a year. However, it can also be triggered by a significant life event, such as getting a new job, moving to another state, or having a baby.
During the COVID-19 pandemic, some states and the federal government implemented measures to streamline Medicaid enrollment and enhance coverage in response to the public health emergency. These actions included suspending certain eligibility redeterminations and relaxing enrollment requirements to ensure individuals could access healthcare services during the crisis.
The redetermination process is crucial for maintaining the integrity of the Medicaid program and ensuring that benefits are provided to those who continue to qualify. If a recipient disagrees with the outcome of the redetermination process and believes they are still eligible for Medicaid, they have the right to appeal the decision. The notice of determination typically provides information on initiating an appeal.
To avoid a gap in coverage, it is important to promptly submit any requested information and follow the instructions in the redetermination notice. In some states, the government may automatically re-enroll Medicaid members, while in others, individuals must re-enroll themselves. Therefore, it is advisable to update your contact information with your state Medicaid or CHIP agency to ensure you receive important communications regarding your coverage.
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Employer-provided coverage: You can get health insurance through your job
If you are no longer eligible for Medicaid, you may be able to get health insurance through your job. This type of health insurance is called "employer-provided coverage". It is offered by an employer to their employees, as well as to employees' spouses or partners and dependents.
When considering employer-provided coverage, it is important to understand the potential costs involved. While your employer may contribute a portion of the monthly premium, you will likely be responsible for additional costs such as deductibles, copayments, and coinsurance. The amount you pay towards your premium each month, after your employer's contributions, is known as your "contribution". Generally, the higher your contribution, the lower your out-of-pocket expenses for healthcare services will be.
It is also worth noting that if you have a health savings account (HSA), you cannot have any part of Medicare and continue contributions to your HSA. However, if it is your spouse's HSA, you can have Part A of Medicare, and your spouse can continue making contributions.
Additionally, if you decide to leave your job or lose your job, you may be eligible for COBRA, a federal law that allows you to keep your existing employer-sponsored health insurance coverage after experiencing a "qualifying event" such as reduced employment hours, loss of dependent child status, divorce, or the death of a covered employee.
When deciding between employer-provided coverage and other options, such as a Marketplace plan, it is important to consider the affordability and coverage of each option. If the employer-provided plan is considered affordable and meets minimum standards, you may not qualify for savings on a Marketplace plan. However, if the employer-provided plan is not affordable, you may qualify for savings or tax credits on a Marketplace plan.
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Cost: Employer insurance may be cheaper with shared costs
When deciding whether to switch from Medicaid to employer health insurance, cost is an important factor to consider. While Medicaid is a government-run health insurance program, employer health insurance is provided by private companies.
Employer-provided health insurance typically covers medical, dental, and other healthcare benefits. It is worth noting that employers that offer health insurance usually pay a significant share of the cost, which can make it a more affordable option for employees. On average, employers pay about 83% of the cost of employees' coverage and 73% of premiums for family coverage. This means that employees generally contribute only 17% or 27% of the total cost, respectively. However, it is important to remember that the specific contribution amounts can vary considerably between different employers, and smaller firms may require employees to pay a larger portion to add family members to the plan.
In terms of affordability, a job-based health plan is generally considered affordable if the employee's share of the monthly premium is less than a certain percentage of their household income. As of 2024, this threshold is 8.39%, and it is expected to increase to 9.02% in 2025. If the employer's insurance is deemed affordable and provides minimum value, individuals are usually not eligible for a government subsidy to purchase a policy in the exchanges. On the other hand, if the employer's insurance is not affordable, the employee or their family members might be eligible for a subsidy to offset the cost of a plan through the exchange or marketplace.
It is worth noting that employer health insurance may also include deductibles, coinsurance, or copayment amounts. These additional costs can impact the overall affordability of the plan. Therefore, it is important to carefully review the deductibles and cost-sharing amounts associated with employer coverage.
In summary, when considering switching from Medicaid to employer health insurance, it is important to evaluate the cost implications. While employer health insurance may offer cost-sharing benefits, it is essential to review the specific plan details, including premiums, deductibles, and cost-sharing amounts, to make an informed decision about which option best suits your needs and budget.
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Medicare: You may be eligible for government health insurance
Medicare is a government health insurance program for US citizens aged 65 or older, or those who have collected SSDI for more than 24 months, or have been diagnosed with end-stage renal disease (ESRD) or ALS. There are four parts to Medicare coverage:
Part A: Hospital Insurance
Part A includes hospital care, skilled nursing facilities, nursing homes, hospice, and home health services. Most beneficiaries do not have a premium for Part A. However, if you or your spouse did not work for 10 years to qualify, the Medicare Part A premium in 2024 is $505. The Part A deductible for inpatient care is $1,632 per benefit period.
Part B: Medical Insurance
Part B includes services from doctors, preventive care, outpatient care, lab tests, mental health care, ambulance services, and durable medical equipment. Part B has a monthly premium, which is why most people with employer coverage do not opt for it.
Part D: Prescription Drug Coverage
Part D ensures you have prescription drug coverage and protects you from the Part D late enrollment penalty.
Medigap Plan
A Medigap plan can help cover your out-of-pocket costs.
If you are turning 65 and are still working with health insurance coverage from your employer, you have several options:
- Keep your employer plan and do not sign up for Medicare.
- Keep your employer plan and sign up for Medicare Part A.
- Keep your employer plan, sign up for Medicare Part A, and decide if you want to add Part B, Part D, and/or a Medigap Plan.
- Keep your employer plan and get your Medicare coverage through a Part C plan.
- Drop your employer plan and sign up for Medicare.
If you decide to leave your job or lose your job, you may be eligible for COBRA, which allows you to keep your existing employer-sponsored health insurance coverage. You can also consider a retiree health insurance plan, although employers are not required to provide this.
If you are already on Medicare and decide to return to work, you can keep your Medicare coverage or drop it and re-enroll when you stop working. However, you must follow the rules to avoid lifetime penalties. You have an eight-month special enrollment period to re-enroll in Medicare after dropping it for an employer plan.
It is important to note that if you have an employer plan and contribute to a health savings account (HSA), it is not recommended to sign up for Part A as you cannot have any part of Medicare and continue contributions to an HSA.
Medicare can be the primary or secondary payer when you have both Medicare and employer coverage. If your company has 20 or more employees, Medicare is the secondary payer. In companies with fewer than 20 employees, Medicare is the primary payer.
When deciding between Medicare and employer insurance, consider your unique needs and budget, including the costs of premiums, deductibles, copayments, and coinsurance.
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Marketplace plans: You may qualify for savings on a Marketplace plan
If you are considering switching from Medicaid to employer health insurance, it is important to understand the potential costs and savings associated with each option. While employer health insurance may offer convenience and ease of enrollment, it is not always the most cost-effective option for individuals and their families.
Marketplace plans, also known as Health Insurance Marketplace plans, offer an alternative to traditional employer-provided insurance. These plans are available to US citizens and nationals who meet certain eligibility requirements and offer potential savings on out-of-pocket expenses.
To qualify for savings on a Marketplace plan, the offered job-based health insurance must be deemed unaffordable and not meet the minimum standards. In 2025, a job-based health plan is considered "unaffordable" if the employee's share of the monthly premium exceeds 9.02% of their household income. Additionally, the plan should cover at least 60% of medical costs to meet the minimum value standard. If these criteria are met, individuals and their households may be eligible for cost-sharing reductions and premium tax credits, ultimately lowering their out-of-pocket expenses.
To determine eligibility for savings, individuals must apply for Marketplace coverage. The application process considers the affordability of job-based insurance premiums for both the employee and their household members. It is important to note that even if the premium is considered affordable for the employee, household members may still qualify for savings if it is deemed unaffordable for them.
Once enrolled in a Marketplace plan, individuals are responsible for reporting any changes in their income or household size. These changes may impact their eligibility for savings and advance payments of premium tax credits. By staying proactive and reporting these changes promptly, individuals can ensure they are maximizing their savings and receiving the most accurate coverage costs.
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Frequently asked questions
Medicaid Redetermination is the government's yearly process of checking that people on Medicaid or CHIP are still qualified for these programs. This process helps ensure that Medicaid stays strong and effective for those who need it.
Many things might have changed since the start of the pandemic, including your place of work, residence, and income. These changes could result in a loss of Medicaid coverage, but there are alternative options, such as employer-provided health insurance.
Employees typically have 60 days from losing Medicaid coverage to request an SEP. However, if you lose eligibility on or before July 10, 2023, you can request an SEP until September 8, 2023.
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