How to shop for new insurance if you lose Medicaid coverage

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

States will begin cutting people off government-funded plans when they no longer qualify based on income, a process that was halted shortly after the COVID-19 pandemic hit.

The timing of these cuts will vary. But all states have insurance marketplaces where people who lose Medicaid can buy new coverage using subsidies. Some states will even connect buyers to a potential new plan.

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 is happening to Medicaid?

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

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

States are already checking eligibility. Some, such as Arizona, Arkansas and Idaho, are expected to begin ending coverage for ineligible people in April. Most states will do this in May, June, and July.

Federal officials estimate that more than 8 million people will lose eligibility and leave Medicaid primarily because their incomes have changed.

Where to get new coverage

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

Buyers can also find coverage sold outside of these markets, but it can be risky. For example, short-term plans may exclude coverage for certain things like a medical condition someone had before signing up.

Income-based subsidies

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

People often don’t realize they can get this help, said Jeremy Smith, director of the West Virginia Health Insurance Navigation Program, which helps shoppers find coverage.

“A very large percentage of people can qualify for a plan starting at $0 a month,” he said.

Differences in coverage

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

Buyers should understand the deductibles and other payments they’ll have to make before committing to a plan, Smith noted.

Individual insurance also groups hospitals and doctors into networks. Insurance may cover much less of the bill for care received outside these networks. Buyers should learn how regular doctors and drugs are covered before enrolling in a new plan.

Individual insurance can also give people more choices in care. Many doctors do not accept Medicaid, and states can only pay for a limited amount of prescriptions.

“It’s possible that people have better access to certain services in the marketplace,” said Jennifer Tolbert, a Medicaid expert at the nonprofit 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 cell phone. They will send notifications if they need more information or if someone is no longer eligible for Medicaid.

“Everybody should do this before April,” said Joshua Brooker, an independent broker based in Lancaster, Pennsylvania. “It will make for a smoother transition.”

Start shopping for new insurance before Medicaid ends. Buyers should take enough time to sort through the options.

The goal should be to have new insurance starting the day after Medicaid ends. This would reduce temporary losses of coverage for regular doctors or important drugs.

Once buyers sign up to shop the insurance marketplace, they have 60 days to find a plan.

I’m getting help

Seeking help may be a good idea, especially for people who need help figuring out their income for the coming year. This is necessary for the calculation of subsidies.

There are several ways people can get help.

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

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

State marketplaces have navigators like Smith who can help people sort through options and understand potential plans. Government-funded navigators are free to use, but they cannot recommend specific choices.

Federally qualified health centers also have counselors who can help people apply.

Independent brokers also help people sort through the options. They will get a fee which usually comes from the premium you pay.

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