The Number of Uninsured in the Coverage Gap and Potential Eligibility with Nationwide Medicaid Expansion

The Affordable Care Act (ACA) was implemented over a decade ago, providing coverage options for millions of Americans. However, ten states have still not adopted the Medicaid expansion, leaving 1.5 million uninsured individuals without access to affordable healthcare. The lack of expansion has highlighted the gaps in Medicaid coverage in these non-expansion states, leading to renewed discussions about the benefits of expanding Medicaid.

In 2023, two states, South Dakota and North Carolina, finally implemented the Medicaid expansion, reducing the number of low-income uninsured individuals nationally without access to Medicaid. With these two states on board, a total of 40 states and the District of Columbia have now adopted the expansion, leaving only ten states that have not. The data from 2022 reveals the number and characteristics of uninsured individuals in these non-expansion states who could benefit from Medicaid if their states were to adopt the expansion.

The coverage gap refers to the situation in states that have not expanded Medicaid, where adults who do not qualify for Medicaid or Marketplace subsidies are left without coverage. The ACA expanded Medicaid eligibility to nonelderly adults with incomes up to 138% of the Federal Poverty Level (FPL), with enhanced federal matching funds. However, the Supreme Court ruling in 2012 made the expansion optional for states, leading to disparities in coverage across the country.

In the ten states that have not adopted the Medicaid expansion, an estimated 1.5 million individuals fall into the coverage gap. These individuals have incomes above the Medicaid eligibility threshold but below the poverty line, making them ineligible for subsidies in the Marketplace. The lack of expansion has resulted in low Medicaid eligibility limits for parents in these states, leaving many without access to affordable healthcare.

Uninsured rates in non-expansion states are nearly double those in expansion states, highlighting the impact of the coverage gap on access to care. People without insurance face challenges in accessing necessary medical services, leading to poorer health outcomes. The majority of individuals in the coverage gap are concentrated in the South, with people of color disproportionately affected by the lack of Medicaid expansion.

Despite having low incomes, many individuals in the coverage gap are part of working families or are employed themselves. However, low-wage jobs often do not provide access to employer-based health insurance, leaving these individuals without coverage. Additionally, many people in the coverage gap have significant health care needs, including disabilities and chronic conditions, further underscoring the importance of expanding Medicaid to provide comprehensive care.

If all states were to adopt the Medicaid expansion, approximately 2.9 million uninsured adults would become eligible for coverage. This includes individuals in the coverage gap as well as those with incomes between 100% and 138% of the FPL. Medicaid expansion has been shown to have positive effects on coverage, access to care, health outcomes, and economic benefits for states and providers.

The temporary fiscal incentive provided by the American Rescue Plan Act for states that newly implement Medicaid expansion has sparked renewed interest in expansion discussions. States that adopt the expansion could see significant fiscal benefits and improvements in access to care for their residents. As more states consider expanding Medicaid, the potential to reduce the number of uninsured individuals and improve health outcomes for vulnerable populations becomes increasingly apparent.