Jordan Means is a freelance writer who specializes in creating in-depth blog posts, white papers and case studies. She has a special interest in healthcare topics.
Updated on August 23rd, 2024
Garrett Ball is the owner of Secure Medicare Solutions, a national, independent Medicare insurance brokerage that works with 30+ companies in 43+ states. Secure Medicare Solutions has been in business since 2007 and worked, first-hand, with tens of thousands of people going onto Medicare or already on Medicare.
We want to help you make educated healthcare decisions. While this post may have links to lead generation forms, this won’t influence our writing. We adhere to strict editorial standards to provide the most accurate and unbiased information.
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:
You have options if you’re in one of these situations and have lost Medicaid coverage.
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 must act quickly. Tools like HealthCare.com help you determine the best plan 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 January 15. Once the window closes, you cannot 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 will 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 Subsidies for Low and Moderate Incomes: The cost of health insurance premiums can be intimidating, but help is available. You might receive a subsidy for ACA coverage, depending on your income level.
Subsidies can range from 0% to 100 % of the monthly premium cost. 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 the ACA. As of February 2023, 11 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 possible, don’t allow the sticker price of health insurance premiums to prevent you from finding out if you might receive a health insurance premium subsidy. Your family status, income level, and the level of coverage you desire will ultimately determine the cost of your monthly premium.
An unexpected loss of health insurance coverage can put you and your family in a very difficult situation. Short-term health coverage is an option if you lost Medicaid coverage and need something to fill the gap.
Short-term plans are meant to be temporary. They do not meet the minimum essential requirements mandated by the ACA. 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 needed.
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.
Short-term health coverage can help you get over the hump until you find a more permanent option if you are in a bind.
Restrictions on Short-Term Plans: If you have significant preexisting conditions, temporary plans might not be your option. 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 obtain a short-term policy, federal rules limit their duration to 364 days for up to three years, depending on state rules. Individual states may limit them to shorter periods, but you can generally keep returning to short-term plans.
Medicaid is great if you’re able to keep it. Though eligibility requirements vary by state, those typically qualifying 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 coverage does not mean 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 the required supporting documentation with your application.
Time Limits to Appeal: No matter the reason for denying your Medicaid, states must 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 must 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 when your Medicaid ends.
Losing Medicaid coverage can be scary and shocking initially, especially if you have ongoing health issues.
If you are dealing with losing Medicaid, remember 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 or dropped from Medicaid, the most important thing to do is obtain some type of coverage. The physical and financial safety you get from health insurance can end up being well worth any cost.
