Medicaid Expansion and the Coverage Gap

Politics Affect Your Health Care Access

Medicaid expansion and coverage gap
Obamacare increased healthcare access to millions by way of Medicaid expansion. pixelfusion3d/E+/Getty Images

Medicaid offers health coverage to more than 72 million Americans, including those with low incomes, pregnant women, the elderly and those with disabilities. Still, millions of people are left uncovered due to differing eligibility criteria in some states. The Centers for Medicare and Medicaid Services sets federal guidelines for Medicaid but states run the actual programs. States also decide whether or not they will pursue Medicaid expansion according to the Affordable Care Act, aka Obamacare.

Health Care and the Federal Poverty Level

Every year the government sets the dollar amount that defines the poverty level. The federal poverty level (FPL) depends on whether you are an individual or in a family, also on the size of your family. Levels have been set for 2016.

States set Medicaid eligibility based on percentages of the FPL as well as other criteria. To expand healthcare access, Obamacare increases the income eligibility criteria for Medicaid to 133 percent of FDP. Obamacare also requires states that agree to Medicaid expansion to allow eligibility based on income alone. These changes took effect in 2014.

Obamacare and the Supreme Court

Despite the Affordable Care Act's intent to increase healthcare access nationwide, the law met political opposition for Medicaid expansion. The Supreme Court ruled in 2012 that it was unconstitutional to require all states to adhere to the law. States then had the choice whether or not to pursue Medicaid expansion.


States electing to pursue Medicaid expansion receive federal dollars to assist them, up to 100 percent of expansion costs for three years and then 90 percent of costs through 2022.

States have different reasons for declining to participate in Medicaid expansion. Some feel it is too costly and could strain state budgets.

Others feel it could result in increased taxes while others feel growth of the program is unsustainable over time. For others, reasons are strictly political party oriented.

As of November 2015, 17 states still decline Medicaid expansion: Florida, Georgia, Idaho, Kansas, Maine, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia,Wisconsin and Wyoming. Three states -- Alabama, Louisiana, and South Dakota -- are considering Medicaid expansion.

The Medicaid Coverage Gap

Obamacare not only allowed for Medicaid expansion, it also provided lower cost insurance options to Americans through the Health Insurance Marketplace. To be eligible for one of these health plans, you have to earn between 100 to 400 percent of the FPL.

In states that do not have Medicaid expansion, this leads to what is known as the coverage gap. If a state has Medicaid eligibility set at less than 100 percent FPL, it may be harder for certain low-income adults to qualify for Medicaid. If these same adults do not earn enough to put them into the range set for the Health Insurance Marketplace, they are left without viable healthcare options. This puts low-income individuals at risk depending on where they live.


The Advisory Board Company. Where the states stand on Medicaid expansion. Published November 23, 2015. Medicaid Overview. Accessed January 3, 2016.

National Conference of State Legislatures. 2016 Federal Poverty Level Guidelines. Published January 25, 2016.

Obamacare Facts. Obamacare Medicaid Expansion. Accessed January 3, 2016.

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