Low-Cost Health Coverage: Medicaid, CHIP, and the Marketplace

Health coverage is one of those things that’s easy to put off until you suddenly need it. But going without can turn a routine illness or injury into a serious financial setback. If your budget is tight, there are public programs designed to help, and many people who might qualify never apply because they assume they won’t.

This guide explains three main options: Medicaid, the Children’s Health Insurance Program (CHIP), and the Health Insurance Marketplace. PennyGuide is an educational website. We don’t sell insurance, process applications, or determine eligibility. Rules vary by state and household, so always confirm details with HealthCare.gov or your state’s Medicaid agency.

Medicaid: free or low-cost coverage

According to HealthCare.gov, Medicaid is a joint federal and state program that provides free or low-cost health coverage to eligible people. It may cover:

Some low-income individuals and families
Children
Pregnant women
Older adults
People with disabilities

Because states run their own programs within federal rules, eligibility varies a lot from state to state. Some states have expanded Medicaid to cover more adults and others haven’t. That’s why the same household could qualify in one state and not another.

HealthCare.gov encourages people to apply even if they don’t expect to qualify, since states consider factors beyond income, such as pregnancy, caring for young children, or disability.

CHIP: coverage for kids

The Children’s Health Insurance Program (CHIP) covers children, and in some states pregnant women, in families that earn too much to qualify for Medicaid. According to InsureKidsNow.gov, Medicaid and CHIP offer free or low-cost health and dental coverage for children and teens.

If you’re a parent who has coverage through work but your kids don’t, or if you’re between jobs, CHIP is worth checking. You can call 1-877-KIDS-NOW (1-877-543-7669) to learn about your state’s program.

The Health Insurance Marketplace

If you don’t qualify for Medicaid or CHIP and don’t have affordable coverage through work, the Health Insurance Marketplace (HealthCare.gov or your state’s own marketplace) lets you compare and buy private health plans. Depending on your household income and size, you may qualify for savings that lower your monthly premium or out-of-pocket costs. The amount of any savings depends on your situation and current rules, so the application is the best way to find out.

When you can enroll

Timing matters with the Marketplace. According to HealthCare.gov, for 2027 coverage:

November 1: Open Enrollment begins.
December 15: Last day to enroll or change plans for coverage starting January 1.
January 15: Open Enrollment ends. Enrolling between December 16 and January 15 means coverage starts February 1.

Outside Open Enrollment, you generally need a qualifying life event, such as moving, losing other coverage, getting married, or having a baby, to get a Special Enrollment Period.

Medicaid and CHIP are different: you can apply for them any time of year.

How to apply: one application, several checks

You have two main paths:

Through the Marketplace. When you fill out a HealthCare.gov application, it shows whether you qualify for Marketplace savings. If someone in your household may qualify for Medicaid or CHIP, your information is sent to your state agency.
Directly through your state Medicaid agency. HealthCare.gov lists contact information for each state’s agency.

Before you start, gather:

Social Security numbers (or document numbers for eligible immigrants) for everyone applying
Pay stubs, W-2s, or other income information
Information about any job-based coverage available to your household

Your tax records are helpful here too. Our tax season organization guide shows how to keep those documents easy to find.

A worked example

For example, imagine a family of four. One parent’s job offers coverage for the employee only, and adding the spouse and two kids would cost more than the family can manage.

Here’s how they might approach it:

In early November, they start an application on HealthCare.gov for the whole household.
The application indicates the children may qualify for CHIP, and their information is sent to the state agency.
For the other parent, they compare Marketplace plans and check whether savings are available.
Before December 15, they pick a plan so coverage can start January 1.

This is only an illustration. Actual results depend on the state, income, household size, and current program rules. But it shows how one application can open several doors at once.

Comparing plans without getting lost

If you’re choosing a Marketplace plan, a few terms make a big difference:

Premium: What you pay each month to keep coverage.
Deductible: What you generally pay for covered care before the plan starts sharing costs.
Out-of-pocket maximum: The most you’d pay for covered services in a year.
Network: The doctors and hospitals the plan works with.

A plan with the lowest premium isn’t always the cheapest overall if you expect to use a lot of care. Our guide to understanding insurance costs explains deductibles and comparing quotes in more depth, and the bill checklist tool can help you fit premiums into your monthly budget.

Watch out for coverage scams

Be cautious of anyone who:

Charges a fee to help you apply for Medicaid or CHIP (applying is free)
Pressures you to buy a plan over the phone right away
Asks for your Social Security number or bank details in an unexpected call or text

Go directly to HealthCare.gov, your state’s marketplace, or your state Medicaid agency. Free, trained help is available through official channels, so there’s no reason to pay a stranger.

Your next small step

Put November 1 on your calendar as the start of Open Enrollment. If anyone in your household is uninsured right now, visit HealthCare.gov today and start an application. Medicaid and CHIP accept applications any time of year.