Covered California vs. Medicaid: What’s the Difference?

Health insurance can be confusing, especially when you're trying to figure out which program is right for you. If you’re a Californian, you’ve likely come across two options: Covered California and Medicaid (known as Medi-Cal in California). Though they both aim to provide affordable healthcare, they operate in very different ways. Let’s break down the key differences and how each might fit your situation in 2024.

1. The Basics: What Are They?

• Covered California is the state’s health insurance marketplace, part of the Affordable Care Act (ACA). It allows individuals and families to compare health plans and offers subsidies to help lower the cost of premiums based on income.

• Medi-Cal is California’s version of Medicaid, a free or low-cost health insurance program funded by the federal and state government. It’s designed for low-income individuals and families who meet certain income criteria.

2. Who Qualifies?

• Covered California is open to most Californians, regardless of income, but the real benefit comes with income-based subsidies. If you make up to 600% of the federal poverty level (about $87,000 for a single person in 2024), you could qualify for significant financial help.

  • Example: If you’re making $50,000 a year, you might qualify for subsidies that lower your monthly premium, making private insurance much more affordable.

• Medi-Cal, on the other hand, has stricter income limits. For a single adult, the threshold is around $20,121 per year in 2024. If you fall under this amount, you’ll likely qualify for Medi-Cal, which offers full coverage at no cost or minimal cost.

3. Cost Comparison: What’s It Going to Cost You?

• Covered California provides access to private insurance plans, so you’ll pay a monthly premium, but with potential subsidies, that cost can be reduced. However, you still may face copays, deductibles, and out-of-pocket expenses depending on the plan you choose.

• Medi-Cal is either free or very low-cost. If you qualify, you won’t pay premiums, and out-of-pocket costs are usually minimal. This is a big benefit for those struggling to afford any type of health insurance.

4. The Coverage: What Do You Get?

• Covered California plans vary depending on the insurance provider and the level of coverage (Bronze, Silver, Gold, Platinum). Each plan must cover the essential health benefits like doctor visits, hospitalization, maternity care, mental health services, and prescription drugs. You get to choose the plan and provider that best fits your needs.

• Medi-Cal also covers a wide range of health services, often very similar to those offered by private plans on Covered California. However, because Medi-Cal is a government-run program, it has a more limited provider network, meaning fewer doctors and specialists may accept it compared to a private plan through Covered California.

5. Income Changes: What Happens if You Earn More or Less?

• If your income fluctuates, Covered California allows you to adjust your subsidy level. If you suddenly earn more or less, you can report that change and get your premium adjusted accordingly. This flexibility helps prevent surprises at tax time.

• With Medi-Cal, if your income increases and you exceed the eligibility limit, you could be transitioned out of the program. Fortunately, many people who “outgrow” Medi-Cal often become eligible for subsidized plans on Covered California.

6. 2024 Updates: What’s New?

In 2024, some important changes impact both programs:

• Enhanced Subsidies: Thanks to the continuation of American Rescue Plan enhancements, Covered California offers even more generous subsidies than before, making it easier for middle-income Californians to afford private insurance.

• Medi-Cal Expansion: In 2024, Medi-Cal continues to expand eligibility for undocumented individuals. Now, all low-income Californians, regardless of immigration status, are eligible for coverage under Medi-Cal.

7. Which One is Right for You?

• If your income is low (under $20,121 for a single person), Medi-Cal is likely your best option. It provides comprehensive coverage with little to no cost.

• If you’re making more but still need help affording health insurance, Covered California with subsidies might be a better fit. It offers more choice and flexibility in choosing a provider but comes with out-of-pocket costs.

Conclusion: Both Help You Stay Covered

Both programs serve the same goal: providing Californians with affordable healthcare options. Medi-Cal is a safety net for low-income individuals, while Covered California bridges the gap for those who earn too much for Medi-Cal but still need assistance. With Infini Insurance Services, we specialize in helping you navigate the Covered California marketplace and find a plan that fits your needs and budget. Whether you're uncertain about your eligibility, or just want to know your options, we're here to guide you every step of the way.

After all, making informed decisions about your health coverage is one of the best ways to ensure peace of mind.