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Medicaid expansion

What is Medicaid expansion?

What is Medicaid expansion?

A provision in the Affordable Care Act (ACA) called for the expansion of Medicaid eligibility in order to cover more low-income Americans. Under the expansion, Medicaid eligibility is extended to adults up to age 64 with incomes up to 138% of the federal poverty level (133% plus a 5% income disregard).

Pre-ACA, Medicaid was generally never available to non-disabled adults under age 65 unless they had minor children. And even then, the income caps to qualify as a parent/caretaker were very low. By expanding Medicaid, the ACA created a viable pathway to coverage for millions of low-income adults.

Why are there some states that haven’t implemented Medicaid expansion?

The ACA called for Medicaid expansion nationwide. But in June 2012, the Supreme Court ruled that states could not be forced to expand their Medicaid programs, so it was left to each state to determine whether to participate or not.

When Medicaid expansion first took effect in 2014, it was only available in 26 states and DC. In the ensuing years, there has been a slow but steady increase in the number of states implementing Medicaid expansion. As of 2022, Medicaid had been expanded in 38 states and the District of Columbia (see list below). Oklahoma and Missouri are the most recent states to have expanded Medicaid, both doing so in 2021.

But Wisconsin is not counted among the Medicaid expansion states. It has implemented what essentially amounts to a partial expansion of Medicaid, and has no coverage gap (described below) because Medicaid is available to low-income adults with income below the poverty level.

But because Wisconsin has not fully expanded Medicaid as called for in the ACA (ie, Medicaid is not available in Wisconsin to adults with income between 100% and 138% of the poverty level), the state does not receive the enhanced federal Medicaid funding that it would receive if it fully expanded Medicaid.

How is Medicaid expansion funded?

The federal government is financing most of the cost of expanding Medicaid, and a small portion is being paid by participating states. The costs for enrollees who are newly eligible under the expanded guidelines were covered 100% by the federal government until the end of 2016. The states then gradually started paying a portion of the cost, reaching 10% by 2020.

The funding will remain at the 90/10 split going forward, with the federal government always paying 90% of the cost of covering the population that became newly eligible due to the expansion of Medicaid.

The states that refuse to expand Medicaid only receive their normal federal Medicaid funding, rather than the enhanced 90% funding that they would receive to cover the newly eligible population if they were to expand coverage (in the Medicaid expansion states, the normal federal funding still applies for the populations that were already eligible pre-expansion).

As noted above, the federal government does not provide this funding unless a state fully expands Medicaid. So Wisconsin continues to receive its normal federal match for Medicaid funding, and Utah was unable to secure Medicaid expansion funding until Medicaid was fully expanded (Utah initially implemented a partial expansion of Medicaid, but did not receive enhanced federal funding for it).

How many people are enrolled in coverage due to Medicaid expansion?

As of 2019, there were about 10 million people who had become newly eligible for Medicaid due to the ACA’s expanded eligibility guidelines. But the COVID pandemic drove the enrollment numbers significantly higher: As of 2022, there were about 21 million Medicaid enrollees who had gained eligibility due to Medicaid expansion.

Total enrollment in Medicaid/CHIP has increased by 53% since 2013 (a growth of more than 31 million people), and that includes the dozen states that continue to reject federal funding to expand Medicaid.

Medicaid expansion has played a large role in the increase, but the growth has also been driven by the fact that Medicaid eligibility redeterminations have been paused since the start of the COVID pandemic. This means enrollment has continued to increase without any of the disenrollments that would normally take place when a person is no longer eligible for Medicaid. This will end once the COVID public health emergency ends.

What is the Medicaid coverage gap?

In the states that have not expanded Medicaid, there’s a coverage gap that leaves about 2 million people ineligible for any sort of affordable coverage. These people are not eligible for premium subsidies in the marketplace because their income is under the poverty level. But they are also ineligible for Medicaid because their states have refused to implement Medicaid expansion.

According to US Census data, the percentage of people below the poverty level who are uninsured is more than twice as high in states that haven’t expanded Medicaid, compared with states that have. To be clear, this is due to the decisions that their states have made, rather than a flaw in the ACA itself. The states could opt to accept federal funding to expand Medicaid at any time, thus closing the coverage gap.

Five states — Texas, North Carolina, Florida, Georgia, and Tennessee — account for the lion’s share of the coverage gap population, and they are among the 12 states where Medicaid expansion is still a contentious issue and the legislature and/or governor are still strongly opposed to accepting federal funding to expand Medicaid. (Note that North Carolina lawmakers might reach an agreement in 2022 that would allow the state to expand Medicaid).

For people in the coverage gap who received unemployment compensation for at least one week in 2021, the American Rescue Plan provided eligibility for premium subsidies. But this was a temporary provision for 2021.

The Build Back Better Act would have provided federal subsidies for four years to people in the coverage gap, allowing them to purchase premium-free coverage with enhanced benefits that leave them with very little out-of-pocket costs. That legislation passed the House in the fall of 2021, but stalled in the Senate due to objections from all GOP Senators as well as two Democrats.

However, there have been ongoing negotiations in 2022 about a budget bill that might include federal funding to close the Medicaid coverage gap.

Which states have expanded Medicaid?

As of 2022, Medicaid has been expanded in 38 states and DC (you can click on a state on this map for more information about each state):

  • Alaska
  • Arizona
  • Arkansas
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Hawaii
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • Utah
  • Vermont
  • Virginia
  • Washington
  • West Virginia

Which states have refused to expand Medicaid?

As of 2022, the following states have not yet accepted federal funding to expand Medicaid:

  • Alabama
  • Florida
  • Georgia
  • Kansas
  • Mississippi
  • North Carolina
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Wisconsin (no coverage gap)
  • Wyoming

Related articles

Get updated information on the current status of Medicaid expansion, along with general information about each state’s program.

When the public health emergency ends, states will begin disenrolling millions from their Medicaid rolls. If you have Medicaid, here's why you shouldn't panic.
Each state has its own Medicaid eligibility requirements, so you can’t just transfer coverage from one state to another, nor can you use your coverage when you’re temporarily visiting another state.
According to Kaiser Family Foundation data, there are about 2.2 million people in the coverage gap across 11 states as of 2021. They aren't eligible for Medicaid, nor are they eligible for premium subsidies in the exchange.
We can stop wringing our hands and wishing for answers. Medicaid is already making a difference in states that implemented ACA's expansion.