The Fundamental Difference
Medicaid and marketplace plans are both forms of health insurance, but they serve different
income levels and are administered differently:
- Medicaid is a joint federal-state program for people with low incomes.
It is free or very low-cost and is administered by your state. Eligibility is income-based.
- Marketplace plans (ACA plans) are private insurance plans regulated by
the ACA. They have premiums and cost-sharing, but ACA subsidies reduce costs for income-eligible
buyers. Enrollment is primarily during Open Enrollment periods.
Income Boundaries
In states that expanded Medicaid, the income thresholds roughly work as follows for a single adult:
- Below 138% FPL (~$21,597 in 2026): Medicaid
- 138%–400% FPL (~$21,597–$62,600): Marketplace with premium tax credits
- Above 400% FPL: Marketplace without full traditional subsidy (enhanced ARP subsidies
may still reduce costs)
In non-expansion states (Florida, Texas, Georgia, South Carolina, Alabama, Kansas), the
Medicaid income limit for non-disabled adults is much lower — typically below $10,000/year
for non-custodial adults. Adults in the coverage gap (below 100% FPL) in non-expansion states
do not qualify for Medicaid OR marketplace subsidies.
Cost Comparison
Medicaid is generally free or near-free for eligible individuals, with minimal premiums
and very low cost-sharing (small copays in some states). Marketplace plans have monthly
premiums (reduced by subsidies) plus deductibles, copays, and coinsurance. In expansion
states, adults near 100% FPL may qualify for both — Medicaid typically has lower
out-of-pocket costs at this income level.
Network Differences
Medicaid networks vary significantly by state. In some states, Medicaid networks are broad
and include most major hospitals and specialists. In others, fewer providers participate in
Medicaid, particularly specialists. Marketplace networks also vary, but generally offer access
to a broader range of specialty care. If access to specific specialists or hospitals is
important, compare networks before choosing between Medicaid and marketplace options.