An increase in your household income while you’re on Medicaid triggers a state eligibility review, but it doesn’t automatically end your coverage. You’re expected to report the change, the state recalculates your income against its current limit, and if you no longer qualify you get written notice, a right to appeal, and a 90-day window to enroll in other health coverage. In states that expanded Medicaid, a single adult stays eligible with income up to roughly $22,025 a year in 2026, and children, pregnant women, and families often have higher limits still.
Report the Change Promptly
Federal rules require every state Medicaid agency to have a process for beneficiaries to report changes that affect eligibility, and states expect you to use it. Most set a deadline between 10 and 30 days from the date the change occurs. Your enrollment paperwork or your state’s benefits portal will tell you the exact timeframe.
You can usually report the same way you applied or renewed: through the state’s online benefits portal, by phone, by mail, or in person at a county assistance office. Have three pieces of information ready — the source of the new income, the date it started, and the new amount. The state will often verify your report against wage and tax databases, and if the numbers don’t line up you’ll be asked for pay stubs, an employer letter, or self-employment records.
Skipping the report is a bad idea. If you keep receiving benefits during a period when your income actually exceeded the limit, the state can require you to repay the cost of the services it covered. Deliberately hiding income can be pursued as fraud, with penalties that include termination, fines, and criminal charges.
What the Redetermination Looks Like
Once you report, the agency runs a redetermination. It checks your new income against wage databases and other records, calculates your updated Modified Adjusted Gross Income, and compares it to the current limit for your household size and category.1HealthCare.gov. Modified Adjusted Gross Income (MAGI) – Glossary Your coverage continues while this review is underway.
Federal rules also build in a cushion most people don’t know about: a 5-percentage-point income disregard that kicks in only when it makes the difference between qualifying and not qualifying.2Medicaid.gov. MAGI Conversion and the 5% Disregard In practice, a state with a 133% federal poverty level limit effectively allows income up to 138% FPL. If your raise puts you barely over the printed limit, the disregard may keep you eligible.
When the review finishes, you’ll get a written notice. If you’re still within the limit, it confirms your coverage continues. If not, it will state the date coverage ends. Federal law requires the state to mail that termination notice at least 10 days before the effective date.3eCFR. 42 CFR 431.211 – Advance Notice Read every date on it the day it arrives. The window between the notice and the end of coverage is narrow, and what you do in those days determines whether you can keep benefits while you appeal or line up new insurance.
Coverage That May Continue Even If You Cross the Limit
A higher income doesn’t always mean everyone in your household is off Medicaid. Several federal protections can extend or preserve coverage.
Children Keep Coverage for 12 Months
Federal law requires states to provide 12 months of continuous eligibility for children under 19.4eCFR. 42 CFR 435.926 – Continuous Eligibility for Children Once a child is enrolled and found eligible, coverage cannot be terminated during that 12-month period regardless of a change in household income. The narrow exceptions are the child turning 19, moving out of state, or the family requesting voluntary termination. Your kids’ Medicaid stays intact through the end of their current eligibility period even if your income jumps sharply.
Transitional Medical Assistance for Working Parents
If you’re a parent or caretaker relative who loses eligibility specifically because your earnings or work hours went up, you may qualify for Transitional Medical Assistance. TMA provides up to 12 months of continued Medicaid for you and your dependent children.5Medicaid.gov. Frequently Asked Questions – Transitional Medical Assistance and Medical Support Some states structure TMA as two six-month periods, with a reporting requirement and a 185% FPL cap for the second half; others offer a single 12-month block with no added conditions. Your termination notice should say whether TMA applies.
Spend-Down in Some States
Some states offer a spend-down option for people whose income is too high for standard Medicaid. You subtract qualifying medical expenses from your countable income, and once those expenses bring your effective income below the limit, coverage kicks in for the rest of the spend-down period. This is most common for older adults and people with disabilities who have substantial ongoing medical costs. Not every state offers it, so ask your caseworker.
How to Appeal a Termination
If you disagree with the state’s decision, you have the right to request a fair hearing. Every termination notice must include instructions for filing in your state.6Medicaid.gov. Understanding Medicaid Fair Hearings Some states accept requests by phone or online; all accept them by mail or in person.
The overall deadline to request a hearing runs from 30 to 90 days depending on the state. But the deadline that matters most is much shorter. If you file your hearing request before the effective date of termination (the “date of action” on the notice), the state must continue your Medicaid until the hearing is decided. There can be as few as 10 days between the mail date and the date of action, so act immediately.
Miss that window by a small margin and some states will reinstate benefits retroactively if you file within 10 days after the date of action. One caution: if the hearing decision goes against you, the state can recover the cost of benefits paid while your appeal was pending. Factor that in before requesting continued coverage.
Options If Your Coverage Does End
Start looking for replacement coverage the day the notice arrives, not the day benefits end. A gap in insurance is the outcome to avoid.
Marketplace Plans
Losing Medicaid qualifies you for a Special Enrollment Period through HealthCare.gov or your state’s exchange. Unlike most qualifying life events, which give you 60 days, losing Medicaid or CHIP gives you 90 days from the date coverage ends to enroll.7HealthCare.gov. Get or Change Coverage Outside of Open Enrollment
Depending on your new income, you may qualify for Advance Premium Tax Credits that lower your monthly premium.8HealthCare.gov. Advance Premium Tax Credit (APTC) – Glossary For 2026, these credits are available to people with income between 100% and 400% of the Federal Poverty Level, about $63,840 for a single person or $132,000 for a family of four.9ASPE. 2026 Poverty Guidelines The enhanced subsidies from recent years expired at the end of 2025, so 2026 credits are less generous and people earning above 400% FPL no longer qualify for premium assistance.10Congress.gov. Enhanced Premium Tax Credit and 2026 Exchange Premiums Estimate your full-year income carefully: if you underestimate, you’ll owe back the excess credit at tax time.
Employer-Sponsored Insurance
If the raise came with a new job or more hours, check whether your employer offers a health plan. Losing Medicaid gives you a 60-day special enrollment window to join your employer’s plan even outside its normal open enrollment.11U.S. Department of Labor. Losing Medicaid or CHIP Employer coverage often costs less than a Marketplace plan when the employer subsidizes the premium, so compare the two before picking one.
CHIP for Children
Even if your family’s income is now too high for Medicaid, your children may qualify for the Children’s Health Insurance Program, which is designed for families earning too much for Medicaid but not enough to comfortably afford private coverage. CHIP income limits vary by state and can reach as high as 400% FPL.12Medicaid.gov. CHIP Eligibility and Enrollment Combined with 12-month continuous eligibility for kids already enrolled, your children may face no coverage gap at all.