Transitional Medical Assistance (TMA) covers the same core Medicaid benefits you were already receiving as a parent or caretaker, extended for up to 12 months after your income rises too high to qualify for regular Medicaid. The program exists specifically to prevent a gap in health coverage when you start earning more from work. All states are required to offer TMA to working parents, though they have flexibility in how they structure the benefits.
Who Qualifies for TMA
TMA is designed for parents and caretaker relatives who were enrolled in Medicaid under the “Parents and Other Caretaker Relatives” eligibility group and then lost that coverage because their earnings pushed them over the income limit, or because their work hours exceeded the state’s requirements for having a dependent child in the household. You must continue living with a child to remain eligible.
This is not a program you apply for separately. When your Medicaid eligibility ends due to increased earnings, your state Medicaid agency should transition you into TMA automatically or notify you of your eligibility. If you live in a state that expanded Medicaid under the Affordable Care Act, you may instead be moved into the expansion adult group if that coverage is equal to or better than what TMA would provide.
What TMA Benefits Include
TMA is Medicaid coverage, not a separate insurance product. That means the benefits generally mirror what you had before losing eligibility: doctor visits, hospital care, prescriptions, lab work, and preventive services. Your children living in the household typically continue receiving full Medicaid benefits as well, including comprehensive dental and medical checkups for those under 21.
However, states do have the authority to alter the scope of TMA benefits. Some states provide the identical benefit package you had on regular Medicaid, while others may adjust what’s covered. The specifics depend on your state’s Medicaid plan. Prescription drug coverage is a good example of how this can vary: in Texas, for instance, most adult Medicaid recipients are limited to three paid prescriptions per month, though managed care enrollees and children under 21 can receive unlimited prescriptions.
Non-emergency medical transportation is another benefit that typically carries over. This covers rides to doctor or dentist appointments, hospitals, pharmacies, and other places where you receive Medicaid services.
How Long Coverage Lasts
TMA is split into two six-month periods, for a possible total of 12 months of continued coverage.
The first six months are straightforward. Once you qualify, coverage continues regardless of changes in your earnings. There is no income test and no resource test during this initial period. Your coverage holds steady even if your income keeps climbing.
The second six months come with more requirements. To qualify for this extension, you must have maintained coverage for the entire first six-month period, completed a quarterly income report due in the fourth month, and still be living with a child. You also need to meet two ongoing conditions: you must have continued working during each month of the reporting period, and your earned income cannot exceed 185% of the federal poverty level.
Reporting Requirements
During the first six months, reporting is minimal. The key deadline is a quarterly report due in the fourth month of your initial coverage period. Completing this report is a requirement for qualifying for the second six-month extension, so missing it can end your TMA coverage early.
During the second six-month period, quarterly reports become the basis for an ongoing income test. Each report needs to show that you worked every month of the reporting period and that your earnings stayed below the 185% FPL threshold. For context, 185% of the 2024 federal poverty level for a family of three is roughly $46,000 per year. If your income exceeds that limit or you stop working, you lose eligibility for the remaining months.
How TMA Works with Employer Insurance
If your new job offers employer-sponsored health insurance, TMA can still run alongside it. Medicaid functions as a secondary payer when you have other coverage, meaning your employer plan pays first and Medicaid picks up remaining eligible costs. States collect information about other insurance coverage when you’re enrolled and coordinate payments accordingly.
In some states, having employer coverage may change how you’re enrolled in Medicaid managed care. Depending on the state’s approach, you might be excluded from a Medicaid managed care plan if you already have commercial insurance, or you might stay enrolled with the state or managed care organization handling the coordination behind the scenes.
Why TMA Matters for Coverage Gaps
The underlying problem TMA addresses is “churning,” where people cycle on and off Medicaid as their income fluctuates around the eligibility threshold. This is especially common for parents in low-wage jobs where hours and pay vary month to month. Regular Medicaid eligibility levels for parents vary dramatically by state, from as low as 17% of the federal poverty level in some states to above 100% FPL in others. That means a very modest raise or a few extra shifts can push a family off Medicaid entirely.
TMA provides a 12-month buffer so that a bump in earnings doesn’t immediately strip your health coverage. For children, the situation is somewhat better: 23 states offer 12-month continuous eligibility for kids in Medicaid, meaning a child’s coverage won’t be disrupted mid-year by income changes. For adults, that same continuous eligibility option is no longer available as a standard state plan option and requires a federal waiver to implement.
If your TMA period ends and your income is still too high for regular Medicaid, you’ll need to transition to other coverage. In expansion states, you may qualify for Medicaid under the adult expansion group if your income is at or below 138% FPL. Otherwise, you’d look at marketplace insurance plans, where you may qualify for subsidies based on your income.