ACA Marketplace vs Medicaid

Key Differences Between ACA Marketplace Plans and Medicaid

ACA marketplace plans and Medicaid both provide health coverage, but they work very differently. The biggest question people face is simple: do I qualify for free Medicaid, or do I need to buy a subsidized plan on the marketplace? The answer almost always comes down to income.

Medicaid is government-funded health coverage that costs you little or nothing. In the 40 states (plus DC) that expanded Medicaid under the Affordable Care Act, adults earning up to 138% of the federal poverty level qualify. For a single person in 2026, that means income up to $21,597 per year, or $1,800 per month. About 91 million Americans are enrolled in Medicaid, making it the largest health insurance program in the country. You can apply any time of year through your state Medicaid office or at HealthCare.gov. Read our full Medicaid guide for details on your state.

ACA marketplace plans are private insurance plans sold through government-run exchanges. If your income is between 100% and 400% FPL ($15,960 to $63,840 for a single person), you can get premium tax credits that lower your monthly cost. The average premium after credits is about $50 per month, according to CMS data. About 22.8 million people enrolled for 2026 coverage. You apply during Open Enrollment (November 1 to January 15) or during a Special Enrollment Period after a qualifying life event. See our full ACA guide for income tables and plan details.

The income line between these two programs is sharp. If you earn under 138% FPL in an expansion state, your marketplace application will route you to Medicaid. You cannot receive ACA premium tax credits if you are eligible for Medicaid. If you earn above 138% FPL, Medicaid is not available (for most adults), and the marketplace is your path to subsidized coverage.

Cost is the other big difference. Medicaid charges no premiums in most states and caps total out-of-pocket costs at 5% of household income. Marketplace plans charge monthly premiums (reduced by tax credits), plus deductibles, copays, and coinsurance. If you pick a Silver plan and earn under 250% FPL ($39,900 for one person), you also get cost-sharing reductions that lower your deductibles and copays. At the lowest income tier (100% to 150% FPL), Silver plans with CSRs cover about 94% of your medical costs.

Can You Get Both ACA and Medicaid?

No. You cannot receive ACA marketplace subsidies and Medicaid at the same time. Federal law says that if you qualify for Medicaid, you are not eligible for premium tax credits on the marketplace. When you apply at HealthCare.gov, the system checks your income and household information against Medicaid rules first. If you appear to qualify for Medicaid, your application is sent to your state Medicaid agency.

There is one important exception. Lawfully present immigrants with income below 100% FPL can qualify for marketplace subsidies even in expansion states, because they may not be eligible for Medicaid due to immigration waiting periods. This closes a coverage gap for certain immigrant households. Our ACA guide explains this rule in more detail.

Within the same household, different family members can have different coverage. A parent earning wages might qualify for an ACA marketplace plan, while their children qualify for Medicaid or CHIP based on higher income limits for kids. You can apply for the whole family in one application at HealthCare.gov, and the system will sort each person into the right program.

If your income changes during the year, you may need to switch between programs. A raise above 138% FPL could move you from Medicaid to a marketplace plan. A job loss could move you in the other direction. Report income changes promptly to avoid gaps in coverage. Losing Medicaid counts as a qualifying life event, which gives you a 60-day Special Enrollment Period to sign up for a marketplace plan.

Which Should You Apply For?

Start with one question: what is your household income relative to the federal poverty level? That answer points you to the right program.

If your income is below 138% FPL in an expansion state: You qualify for Medicaid. For a single person, that means earning under $21,597 per year. For a family of four, under $44,568. Apply any time at your state Medicaid office or through HealthCare.gov. You do not need to wait for Open Enrollment.

If your income is between 138% and 400% FPL: You qualify for ACA marketplace plans with premium tax credits. For a single person, that means earning $21,597 to $63,840. Apply during Open Enrollment (November 1 to January 15) or during a Special Enrollment Period. Many people in this range pay $50 per month or less after credits.

If you live in a non-expansion state and earn under 100% FPL: You may fall into the "coverage gap." You earn too much for your state's limited Medicaid but too little for marketplace subsidies (which start at 100% FPL). Texas, Florida, Georgia, and Mississippi are among the 10 states with this gap. Check your state benefits page for local programs that might help.

If your income is above 400% FPL: You can still buy marketplace plans at full price. Under the Inflation Reduction Act, people above 400% FPL may also receive credits if their benchmark plan costs more than 8.5% of household income. Use our free screener to check what you qualify for.

If you are not sure where you fall: Use our eligibility screener. It takes about five minutes and checks both Medicaid and ACA subsidies, along with 20 other programs. You can also call the marketplace at 1-800-318-2596 for help.

Frequently Asked Questions

Is Medicaid the same as Obamacare?

No. Obamacare is the common name for the Affordable Care Act, the law that created the Health Insurance Marketplace and expanded Medicaid. The ACA marketplace and Medicaid are two separate programs under that same law. The marketplace sells subsidized private insurance plans. Medicaid is direct government health coverage at little or no cost. When people say "Obamacare," they usually mean marketplace plans, but the ACA also expanded Medicaid to millions more people.

What happens if my income changes during the year?

If your income drops below 138% FPL, you may now qualify for Medicaid and should apply through your state. If your income rises above 138% FPL and you lose Medicaid, that triggers a Special Enrollment Period, giving you 60 days to sign up for an ACA marketplace plan. Report income changes to the marketplace or your state Medicaid office promptly to keep your coverage and subsidies accurate.

Do ACA marketplace plans and Medicaid cover the same things?

Both cover the basics: doctor visits, hospital stays, prescriptions, mental health, maternity care, and preventive services. Medicaid often covers more. Most state Medicaid programs include dental care for adults, vision, hearing, long-term care, and transportation to medical appointments. Marketplace plans must cover 10 essential health benefits but may not include adult dental or vision. Medicaid also has far lower out-of-pocket costs.

Can my kids get Medicaid if I have an ACA plan?

Yes. Children qualify for Medicaid and CHIP at higher income levels than adults. In most states, children can qualify with household income up to 200% to 300% FPL. A parent earning too much for Medicaid can have an ACA marketplace plan while their children are covered by Medicaid or CHIP. One application at HealthCare.gov sorts each family member into the right program.

What is the coverage gap?

The coverage gap affects adults in the 10 states that did not expand Medicaid. In these states, adults without children or disabilities may not qualify for Medicaid at any income level. At the same time, ACA marketplace subsidies start at 100% FPL ($15,960/year for a single person). People earning below that threshold in non-expansion states may have no affordable coverage option. Check your state benefits page for local alternatives.

How do I know if my state expanded Medicaid?

As of 2026, 40 states and DC have expanded Medicaid. The 10 states that have not expanded are Texas, Florida, Georgia, Mississippi, Alabama, Tennessee, South Carolina, Kansas, Wisconsin, and Wyoming. Wisconsin covers adults up to 100% FPL through a waiver, so it functions similarly to expansion. Visit Medicaid.gov for the current list, or check your state benefits page.

Can I apply for Medicaid any time, or do I have to wait for Open Enrollment?

Medicaid has no enrollment period. You can apply any day of the year. This is a major difference from ACA marketplace plans, which require you to sign up during Open Enrollment (November 1 to January 15) or qualify for a Special Enrollment Period. If you think you qualify for Medicaid, apply now through your state Medicaid office or at HealthCare.gov.

What if I qualify for Medicaid but want a marketplace plan instead?

You cannot choose a marketplace plan with subsidies if you are eligible for Medicaid. The law requires you to take Medicaid when you qualify. You could buy an unsubsidized marketplace plan at full price, but that would cost hundreds of dollars per month with no tax credit. Medicaid provides broader coverage at lower cost, so there is rarely a reason to choose a marketplace plan over Medicaid. If you are unsure about your eligibility, use our free screener to check.