Does Medicaid Cover Auto Insurance?

Last Updated on May 16, 2021

If you have Medicaid, then you get discounted medical insurance. But does Medicaid cover auto insurance? Are there any special car insurance options for drivers on Medicaid?

There is no Medicaid car insurance. However, it’s possible for Medicaid to cover certain medical bills after a car accident. Plus, if you qualify for Medicaid, certain states have discount car insurance programs for lower-income individuals, and anyone on Medicaid automatically qualifies.

Today, we’re explaining everything you need to know about Medicaid and car insurance, including whether or not Medicaid covers car insurance.

No, Medicaid Does Not Cover Car Insurance

does medicaid cover auto insuranceMedicaid covers certain medical expenses, hospitalization costs, checkup fees, and surgeries. However, Medicaid does not cover car insurance.

There is no special Medicaid car insurance, nor do insurers offer a special type of Medicaid discount.

However, if you are on Medicaid and are injured in a vehicle accident, then Medicaid could cover your hospital treatment. Medicaid could cover your own hospital bills in this situation. However, Medicaid will not cover hospital bills for your passengers, nor will it cover the cost of repairing your vehicle or similar costs.

Some States Offer Low Income Auto Insurance to Medicaid Users

If you are on Medicaid, then you should qualify for low-income car insurance. Only four states offer low-income car insurance. If you qualify, however, then you could save hundreds per year on car insurance.

The four states that offer low-income car insurance to Medicaid users include:

  • California
  • Hawaii
  • Maryland
  • New Jersey


California has one of the biggest and best-known low-cost auto insurance programs in America. The appropriately-named California Low-Cost Automobile Insurance Program lets drivers in California buy car insurance for just $200 to $500 per year, depending on location. If you qualify for Medicaid, then you should qualify for the CLCA. In fact, even drivers above the federal poverty line could qualify for CLCA auto insurance.


Drivers on Medicaid in Hawaii can qualify for the Aid to the Aged, Blind, and Disabled (AABD) program, which provides various benefits to low-income individuals and families across the state. Car insurance is one of these benefits. You must be a resident of Hawaii, a US citizen, and meet certain low-income requirements to qualify. If you qualify for Medicaid in Hawaii, then you should meet low-income requirements to qualify for AABD benefits.


Drivers in Maryland on Medicaid could qualify for the Maryland Auto Insurance Program, formerly known as MAIF. With MAIF, residents of Maryland can buy liability insurance at a cheaper price if they are otherwise unable to afford it. If you qualify, then you receive a policy with $20,000 of personal injury liability coverage and $15,000 of property damage liability coverage (expressed as a 20/15 policy).

New Jersey

New Jersey has a low-income driver benefits program called the Special Auto Insurance Policy (SAIP). If you are eligible for Medicaid, then you could obtain cheap auto insurance through SAIP. SAIP auto insurance only covers medical liabilities, which means it covers the medical bills of anyone you injure while driving. However, it’s considered legal car insurance in New Jersey. In most ZIP codes, SAIP costs around one dollar per day.

When Does Medicaid Cover Car Accident Injuries?

In certain situations, Medicaid could cover car accident injuries. However, Medicaid covering car accident injuries is controversial, and it varies state by state.

Medicaid is considered a secondary payer under federal law, which means it only covers car accident expenses if no third-party insurance covers those costs. Your insurance – or the other driver’s insurance – would cover any accident-related expenses first.

However, if you are not insured, or if the other driver did not have insurance, or if you exceeded your insurance limits, it’s possible Medicaid could cover car accident medical bills.

Ultimately, the issue of Medicaid covering car accident injury expenses is complicated, and it varies between cases and states.

Car Insurance Discounts for Medicaid Users

If you are on Medicaid, then you could qualify for certain discounts. If you don’t live in a state with a low income car insurance program, then you could still qualify for certain discounts.

Discounts available to drivers on Medicaid include:

Safe Driving Discounts: Do you have any speeding tickets or at-fault accidents within the last 3 to 5 years? If you have a clean driving record, then you could qualify for a safe driving discount. Most insurance companies offer discounts of 30% to 50% to drivers with a clean record, which means no speeding tickets, at-fault accidents, or other significant incidents within the last 5 years.

Low Mileage Discounts: Are you retired? Do you work from home? Do you take public transit or bike around your city? If so, you may qualify for a low mileage discount. You drive significantly fewer miles than the average driver, which means you are less risky to insure. Most insurance companies offer low mileage discounts to drivers who drive fewer than 7,000 miles per year. You may need to install an app or driver tracking system to verify your mileage.

Good Student Discounts: If you are a high school or college student under 25 with a B or better grade average, then you could qualify for a good student discount. You could qualify for this discount if anyone on your policy (like your teenage child) is in high school or college.

Multi-Policy Bundling Discounts: If you need home insurance, renters insurance, car insurance, life insurance, and other insurance products, then you could save 30% on all policies by bundling them together with a single company. All insurers offer some type of bundling discount.

Multi-Vehicle Discount: Do you have multiple vehicles you need to insure? A multi-vehicle discount can save you hundreds of dollars per year over buying separate policies.

Consider Dropping Collision or Comprehensive Coverage

Most states require drivers to have liability coverage, which covers damage you cause to other people while driving.

However, no state requires collision or comprehensive coverage, which covers damage to your own vehicle while driving.

Dropping collision and comprehensive coverage can cut your premiums by 50%. If you want to save money on car insurance and don’t mind paying for repairs out of pocket (or absorbing that risk), then consider dropping collision and comprehensive coverage to save money.

What’s the Best Car Insurance for Low-Income Drivers on Medicaid?

As a low-income driver on Medicaid, car insurance can seem expensive. Lower-income people pay a disproportionate amount of their income towards auto insurance.

However, by choosing the right car insurance company, you can save significantly. Some of the best car insurance companies for low-income drivers include:

All of these insurers are among the largest in America. They’re large companies known for charging lower insurance prices than most of their competitors. Request quotes from all of these companies and more by entering your ZIP code into a car insurance comparison website today.

Final Word on Medicaid and Car Insurance

Medicaid does not cover car insurance. There is no special Medicaid car insurance, and insurers do not offer a specific discount to those on Medicaid.

However, four states offer insurance programs to low-income individuals and families. If you live in California, Hawaii, Maryland, or New Jersey, then you could qualify for discounted car insurance via state-sponsored programs.

Alternatively, drivers on Medicaid who live in other states can take advantage of certain discounts and shop around for car insurance, although Medicaid does not specifically cover auto insurance in any state.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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