Medicaid expansion is a provision in the Affordable Care Act (ACA) that called for the expansion of Medicaid eligibility to cover more low-income Americans. Under the expansion, some states have expanded their Medicaid programs to cover all people with household incomes below a certain level, while others have not. The Medicaid coverage gap refers to uninsured people who do not qualify for marketplace assistance under the ACA and reside in states that have not adopted Medicaid expansion.
The key features of Medicaid expansion are:
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Voluntary: The U.S. Supreme Court ruled that the Medicaid expansion is voluntary with states. As a result, some states haven’t expanded their Medicaid programs.
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Income eligibility: Adults in those states with incomes below 100% of the federal poverty level, and who don’t qualify for Medicaid based on disability, age, or other factors, fall into a gap. Their incomes are too high to qualify for Medicaid in their states, and their incomes are below the range the law set for savings on a Marketplace insurance plan.
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Federal funding: States choosing to participate in Medicaid expansion would have additional Medicaid costs fully covered by the federal government in the first three years of expansion, with a stepwise decrease in the federal governments share to 90 percent in 2020 and thereafter.
As of early 2023, Medicaid had been expanded in 38 states and the District of Columbia. Medicaid expansion makes people healthier and more financially secure by improving access to preventive and primary care, providing care for serious diseases, preventing premature deaths, and reducing the cases of catastrophic out-of-pocket medical costs. The Medicaid expansion particularly affects people of color, given that they are more likely to lack health insurance and also to have low incomes.
