How to shop for new insurance if you lose Medicaid coverage

Medicaid coverage will end for millions of Americans in the coming months, and it will push many into unfamiliar territory: the health insurance marketplace.

States will start cutting people from the government-funded plans when they no longer qualify based on income, a process that has been paused since shortly after the COVID-19 pandemic hit.

The timing of these cuts will vary. But shopping for affordable insurance that covers regular doctors and prescriptions can be daunting, especially in marketplaces that offer dozens of choices and subsidies to help pay for them. Experts say it helps to start this search with a plan.

Here’s a deeper look at the process.

What’s happening to Medicaid?

Nearly 85 million people are covered by government-funded Medicaid, which focuses on people with low incomes.

At the start of the pandemic, the federal government prohibited states from kicking people off Medicaid if they were no longer eligible. That ban ends this spring, and many people on Medicaid will be introduced to this so-called redetermination process for the first time.

Where to get new coverage 

State-based health insurance marketplaces created by the Affordable Care Act are the only places where people can buy individual insurance with help from an income-based subsidy. They can be found through the federal government’s website.

Income-based subsidies 

The cost of any new plan should be one of the first things people consider. Shoppers can get income-based subsidies to help pay monthly premiums of plans they buy on the state-based marketplaces. Those subsidies were enhanced during the pandemic.

Coverage Differences 

Individual insurance differs from Medicaid in several ways. Some marketplace plans come with a big deductible that people must pay before most coverage starts.

Individual insurance also groups hospitals and doctors in networks. The insurance may cover much less of the bill for care received outside those networks. Shoppers should learn how any regular doctors and medications are covered before enrolling in a new plan.

Individual insurance also can give people more care choices. Many doctors don’t accept Medicaid, and states may pay for only a limited number of prescriptions.

“It is possible that people will have better access to certain services in the marketplace,” said Jennifer Tolbert, a Medicaid expert at the non-profit Kaiser Family Foundation.

Important steps if you are on Medicaid 

Make sure your state program has your current contact information, including a mailing address plus email and cellphone. They will send notifications if they need more information or if someone no longer qualifies for Medicaid.

“Everyone should do that before April,” said Joshua Brooker, an independent broker based in Lancaster, Pennsylvania. “It’s going to make a smoother transition.”

Start shopping for new insurance before Medicaid ends. The goal should be to have new insurance that starts the day after Medicaid ends.

Once shoppers register to shop in the insurance marketplace, they have 60 days to find a plan.

Getting Help

Seeking assistance may be a good idea, especially for people who need help figuring out their income for the coming year. That’s needed to calculate subsidies.

There are several ways people can get help.

States will transfer the names and contact information of those who no longer qualify for Medicaid to their marketplaces. They also will send a letter to Medicaid beneficiaries telling them how to connect to the marketplace, said Kate McEvoy, executive director of the nonprofit National Association of Medicaid Directors.

Some states will go further. California’s marketplace, Covered California, will enroll people in a qualified health plan and send them the information. Those people then must confirm enrollment and pay the first premium to remain covered.

Image courtesy of (Image: Washington Examiner)

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