Covered California is not Medicaid, but the two programs are closely connected. Medicaid in California is called Medi-Cal, and it provides free or very low-cost health coverage to residents with limited incomes. Covered California is the state’s health insurance marketplace where you shop for private plans and may qualify for financial help to lower your premiums. They are separate programs with different eligibility rules, different costs, and different plan structures, but you apply for both through the same application.
How the Two Programs Work Together
When you fill out an application on CoveredCA.com, the system automatically checks whether your income qualifies you for Medi-Cal or for subsidized private coverage through Covered California. You don’t need to apply separately. If your income falls below the Medi-Cal threshold, your application is forwarded to your county’s Medi-Cal office. If your income is above that line, you’ll see private health plans you can purchase, often with federal tax credits that reduce your monthly premium.
Both programs cover essential health benefits: doctor visits, hospital stays, prescriptions, mental health services, maternity care, and preventive care. The key difference is cost. Medi-Cal typically has no monthly premium and little to no out-of-pocket costs. Covered California plans have monthly premiums (reduced by subsidies if you qualify) along with copays, deductibles, and coinsurance that vary by plan tier.
Medi-Cal Income Limits
Medi-Cal eligibility is based on your household income relative to the federal poverty level (FPL). For most adults, the cutoff is 138% of the FPL. For 2026, that translates to roughly $22,025 per year for a single person or $45,540 for a family of four. Children qualify at higher income levels, up to 266% FPL, which means a child in a family of four can be covered even if household income reaches about $87,780. Pregnant individuals qualify up to 213% FPL, or about $70,290 for a family of four.
For most people under 65 without a disability, Medi-Cal does not count your assets like savings accounts, cars, or property. It looks only at income. However, if you are 65 or older, have a disability, or need nursing home care, asset limits do apply. The current limit is $130,000 for one person, with $65,000 added for each additional household member.
Who Qualifies for Covered California Instead
If your income is above the Medi-Cal threshold but you don’t have affordable coverage through an employer, Covered California is where you’d get insurance. The marketplace offers plans from 12 private health insurance companies, organized into metal tiers (Bronze, Silver, Gold, Platinum) that reflect how costs are shared between you and the insurer.
Federal premium tax credits are available to help lower your monthly cost. To qualify, your household income generally needs to be at least 100% of the federal poverty level. Through recent legislation, there is no upper income cap for these credits, though the amount of assistance shrinks as your income rises. At lower incomes just above the Medi-Cal line, the subsidies can be substantial enough to bring premiums close to zero.
Coverage Differences That Matter
Medi-Cal includes adult dental and vision benefits as part of the standard package. On Covered California, dental plans are sold separately (five dental insurers participate), and adult vision coverage is limited depending on the plan you choose. Pediatric dental and vision are included in all marketplace plans as required essential health benefits.
Another practical difference: Medi-Cal assigns you to a managed care plan in your county, and your choice of doctors and hospitals is limited to that plan’s network. With Covered California, you pick your insurer and plan tier, giving you more control over your provider network, but you pay more for that flexibility.
Special Rules for Immigrants
Immigration status affects which program you can access. Lawfully present immigrants can qualify for either Medi-Cal or Covered California depending on income. For undocumented residents, California has expanded Medi-Cal eligibility to cover children and youth under 19, pregnant individuals through one year after pregnancy ends, and former foster youth under 26. Undocumented adults outside those categories are not eligible for full-scope Medi-Cal or Covered California marketplace plans.
What Happens if Your Income Changes
Because both programs use income as the main qualifying factor, a change in earnings can shift you from one program to the other. If you’re on Medi-Cal and get a raise that pushes you above 138% FPL, you would transition to a Covered California plan (with subsidies if eligible). If you lose income while on a Covered California plan, you may become eligible for Medi-Cal. In either case, you report the change through CoveredCA.com or your county Medi-Cal office, and the system reassesses which program fits your new situation.
This is one reason the single application matters. The two programs function as a continuous coverage ladder: Medi-Cal catches people at lower incomes, and Covered California’s subsidized plans pick up where Medi-Cal leaves off, so there’s no income gap where a Californian would be left without an affordable option.
Small Business Coverage
Covered California also operates a separate program for employers. If you own a business with 100 or fewer full-time-equivalent employees, at least one of whom is a W-2 employee (not a spouse of the owner), and most of your eligible workers live in California, you can offer coverage through Covered California for Small Business. This is entirely separate from Medi-Cal and gives small employers access to the same private insurers available on the individual marketplace.