Yes, when people refer to “state insurance,” they almost always mean Medicaid. Medicaid is a joint federal and state program that provides free or low-cost health coverage to people with limited income. Because each state runs its own version of the program, often under a unique local name, many people simply call it “state insurance” without realizing they’re talking about Medicaid.
Why Medicaid Gets Called “State Insurance”
Medicaid is funded by both the federal government and individual states. The federal government sets baseline rules that every state must follow, but each state designs its own program, sets its own eligibility thresholds, and often brands it with a different name. In Colorado, for example, it’s called Health First Colorado. In California, it’s Medi-Cal. In New York, it’s simply called Medicaid, but it runs through the state’s own enrollment system. This patchwork of names and systems is why so many people just say “state insurance” when they mean Medicaid.
The federal government picks up a large share of each state’s Medicaid costs through a formula called the federal medical assistance percentage. States with lower per capita incomes receive a bigger federal contribution, while wealthier states cover more of the tab themselves. This funding structure is why Medicaid is considered a joint program rather than purely a state one.
What “State Insurance” Is Not
There are a few other types of coverage that could technically be called “state insurance,” and it helps to know the difference.
- State employee health insurance: This is employer-sponsored coverage provided to people who work for state government. It works like any job-based plan, with premiums, deductibles, and copays. It has nothing to do with Medicaid.
- State marketplace plans: These are private insurance plans sold through your state’s Affordable Care Act exchange (sometimes through HealthCare.gov, sometimes through a state-run website). You pay monthly premiums for these plans, though you may qualify for subsidies that lower the cost. They are not Medicaid.
- CHIP: The Children’s Health Insurance Program covers kids in families that earn too much for Medicaid but too little to afford private coverage. CHIP is also jointly funded by states and the federal government, and in some states it’s folded directly into the Medicaid program. In others, it runs as a separate program.
If you qualify for Medicaid, you lose eligibility for premium tax credits on a marketplace plan, so you’d pay full price for marketplace coverage. That makes it important to know which program you actually qualify for before choosing a plan.
Who Qualifies for Medicaid
Eligibility depends on your income, household size, and which state you live in. In the 40 states (plus Washington, D.C.) that expanded Medicaid under the Affordable Care Act, most adults with household income up to 138% of the federal poverty level qualify. For 2025, that means a single person earning up to about $21,597 per year, or a family of four earning up to about $44,367 per year.
In states that did not expand Medicaid, eligibility is more restrictive. Coverage may be limited to specific groups: pregnant women, children, parents with very low incomes, and people with disabilities. A single adult without children in a non-expansion state often cannot qualify for Medicaid at all, regardless of income.
Children generally qualify at higher income levels than adults. And certain groups, including pregnant women and people receiving disability benefits, have different eligibility pathways that vary by state.
What Medicaid Covers
Federal law requires every state’s Medicaid program to cover a core set of services. These include hospital stays, outpatient care, doctor visits, lab work and X-rays, home health services, nursing facility care, family planning, and transportation to medical appointments. Children enrolled in Medicaid receive comprehensive screening, diagnostic, and treatment services that go beyond what adult coverage requires.
States can also choose to cover additional services on top of these federal minimums. Many states add prescription drugs, dental care, vision services, physical therapy, and mental health treatment. This is part of why Medicaid looks different depending on where you live. One state might cover adult dental cleanings while another covers only emergency dental procedures.
Medicaid typically has no monthly premiums. Most enrollees pay nothing out of pocket for covered services, though some states charge small copays for certain items, usually just a few dollars.
How to Apply
You can apply for Medicaid in two ways. The first is through your state’s Medicaid agency directly. Each state has its own application portal and contact information, which you can find by searching your state’s name plus “Medicaid application.”
The second route is through HealthCare.gov, the federal marketplace. When you fill out a marketplace application, the system checks whether anyone in your household qualifies for Medicaid or CHIP. If so, it forwards your information to your state agency, which then contacts you about enrollment. This can be a convenient option if you’re unsure whether you qualify for Medicaid or for subsidized marketplace coverage, since the same application sorts you into the right program.
Processing times vary by state, but many states can determine eligibility within a few weeks. Some offer presumptive eligibility, meaning you can get temporary coverage while your full application is reviewed.