Can You Have Medicaid and Private Insurance?

What you need to know about Medicaid combined with other insurances

Two people hold a baby in a hospital room.

Image taken by Mayte Torres / Getty Images

Medicaid and private health insurance provide coverage for millions of people, and it’s common for the average person to have one insurance or the other. However, it’s possible to have both Medicaid and private insurance. Learn how having Medicaid and private health insurance works, and how it can benefit you.

Key Takeaways

  • Medicaid is a health insurance plan jointly funded by federal and state governments to provide coverage to Americans with low income.
  • Private insurance includes plans offered by employers, Obamacare plans purchased through the Marketplace, or those purchased directly through private insurance companies.
  • You can have Medicaid and private health insurance at the same time, and there are some advantages and disadvantages to doing so.
  • In many cases, if you’re eligible for both Medicaid and private insurance, your private insurance plan will be the primary coverage, and your Medicaid coverage will be supplemental.

Medicaid and Private Insurance Eligibility

Generally, you can buy private insurance through your employer (if your employer offers it),  directly from an insurer, or via online marketplaces. For Medicaid, states generally must cover individuals with low incomes, children and pregnant women who meet certain requirements, and those eligible for Supplemental Social Security Income—although the exact requirements may differ slightly from state to state.


If you purchase your health insurance through the Health Insurance Marketplace, then the Marketplace will determine whether you qualify for Medicaid based on your application information. If it turns out you do qualify, the Marketplace will send the relevant information to your state, and your state will contact you.

In some cases, you can have both Medicaid and private health insurance, as long as you meet your state’s income requirements to qualify for Medicaid. Having both types of insurance might make your medical care significantly more affordable. That said, there may be some downsides to using both.

How Having Medicaid and Private Insurance Works

If you have both Medicaid and private insurance, it’s important to understand how they interact. This interaction is known as the “coordination of benefits” (COB).

In most cases, when you have Medicaid as well as another health insurance coverage, Medicaid serves as last-resort supplemental coverage—often known as “wrap-around” coverage. This means your other health insurance plan is required to pay for covered expenses first. It’s only after your other plan has kicked in first that Medicaid will cover what’s left.

Advantages of Having Medicaid and Private Insurance

Carrying both Medicaid and private insurance can drastically reduce your out-of-pocket costs, especially if your private insurance plan has a high deductible or pays for only a small percentage of your care.

Let’s say you get a hospital bill for $5,000 and you have a coinsurance of 20% on your private insurance plan. As a result, your plan will cover 80% of your hospital bill, which amounts to $1,000. Under normal circumstances, you would be on the hook for the remaining $1,000.

But if you have Medicaid as supplemental coverage, it would pay for the remaining balance, minus any coinsurance or copay you have. So if your Medicaid coverage requires a copayment of $50, you would pay that amount while Medicaid covers the other $950.

Disadvantages of Having Medicaid and Private Insurance

If you’re eligible for Medicaid, you’re no longer eligible for any premium tax credits on Obamacare coverage. As a result, rather than Medicaid saving you money, it could actually increase your premiums if you continue to carry the plan you bought from the Marketplace.

There could also be a disadvantage even if your private insurance plan isn’t a Marketplace plan, but is provided by your employer. If you choose to keep Medicaid and your employer insurance, maintaining your employer-sponsored coverage likely means continuing to pay substantial costs for premiums.


The average employee with an employer-sponsored insurance plan paid $5,969 per year in premiums in 2021 for a family plan and $1,299 for individual coverage, according to KFF’s 2021 Employer Health Benefits Survey. Health care costs can be even higher for those who don’t have coverage through their employer and must purchase a plan directly through a private insurer.

Considering that Medicaid eligibility is dependent on having a low income, the yearly premiums for private health insurance could make up a significant amount of your budget. If you feel like your Medicaid coverage is as good as or better than your private plan, it may not be worth it to keep your private insurance.

Is It Worth It To Keep Both?

To decide whether it’s worth it to maintain both coverages, run the numbers to see what your total out-of-pocket cost would be for only Medicaid versus Medicaid with your private insurance. Pay special attention to what your state’s Medicaid covers since it could be worth it to keep your private insurance if your state’s Medicaid doesn't provide all the coverage you need.

To help you decide, let’s back up a bit and go over some basic information about Medicaid and private health insurance.

Medicaid vs. Private Insurance

Medicaid and private insurance are two of the most popular types of health insurance coverage for American families.

What Is Medicaid?

Medicaid is a government-funded health insurance program that works as a partnership between the federal and state governments. This program is designed for individuals with low income, children, elderly adults, pregnant women, and those with disabilities.


As of May 2022, roughly 88.98 million people had Medicaid.

Medicaid was created in 1965. Each state operates its own Medicaid program and is able to have different program guidelines, features, and requirements. The exact services covered under Medicaid may differ depending on the state, but services that all states are required to cover include (but aren’t limited to):

  • Inpatient and outpatient hospital services
  • Physician services
  • Lab and X-ray services
  • Home-health services
  • Family-planning services
  • Transportation to medical care

The federal government allows states to require you to pay for some of your Medicaid costs in the form of copayments, deductibles, and coinsurance. However, cost-sharing isn’t allowed for emergency services, family-planning and pregnancy services, or children’s preventive care. States must cover 100% of those services.

What Is Private Insurance?

Private health insurance includes any health insurance plan that’s offered by a private insurer and isn’t funded by the government. Many Americans receive their private insurance through an employer-sponsored group plan, while others purchase their own coverage directly through a private insurer or through the Health Insurance Marketplace.

How private insurance works may look a bit different depending on whether or not it’s an employer-sponsored plan. When companies offer insurance plans, they often give their employees a select list of plans to choose from. They may also cover a certain portion of their employees’ premiums. But if you buy health insurance outside of an employer-sponsored plan, you’re usually responsible for your entire premium, unless you buy a Health Insurance Marketplace plan and are eligible for federal premium tax credits.

Because private insurance isn’t a government-run program, plans may look different from one insurer to the next. That said, there are 10 essential health benefits all private insurance plans must cover (not including short-term insurance), as required by the Affordable Care Act:

  • Ambulatory services
  • Emergency services
  • Hospitalization
  • Pregnancy, maternity, and newborn care
  • Mental health services and substance abuse disorder services
  • Prescription drugs
  • Rehabilitative and habilitative care and devices
  • Laboratory services
  • Preventive care and chronic disease management
  • Pediatric services

Like Medicaid, private insurance usually requires you to share the cost of your care in the form of premiums, copayments, deductibles, and coinsurance.

Frequently Asked Questions (FAQs)

Is it better to have Medicaid or private insurance?

Whether Medicaid or private insurance is better depends on your situation. In most cases, Medicaid is a better option because it is typically more comprehensive and more affordable than private insurance.

Can I use Medicaid as secondary insurance after my insurance through my employer?

Yes, you can maintain your employer-sponsored insurance plan as your primary coverage while also qualifying for Medicaid, which would pay for, generally speaking, any qualifying expense that your primary plan doesn’t cover.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. KFF. “Employer Health Benefits 2021 Summary of Findings.” Pages 1-2.

  2. “May 2022 Medicaid & CHIP Enrollment Data Highlights.”

  3. “Program History.”

  4. “Mandatory & Optional Medicaid Benefits.”

  5. “Cost Sharing Out of Pocket Costs.”

  6. “What Marketplace Health Insurance Plans Cover.”

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