That problem — becoming just successful enough to suddenly lose Medicaid — is common. It's called a benefit cliff, said Pamela Herd, who researches government aid at the University of Michigan.
"It just doesn't make any sense that someone gets a dollar pay raise and all of a sudden they lose all access to their health insurance," Herd said.
She said a partial fix exists called continuous eligibility, which guarantees an individual's Medicaid coverage for a specific period, such as a year or longer. The goal is to give people time to adjust when they do earn more money. Continuous eligibility also helps maintain coverage for low-income workers with unpredictable hours and whose pay changes month to month.
