Medicaid coverage gap

In the context of public healthcare policy of the United States, the Medicaid coverage gap refers to uninsured people who do not qualify for marketplace assistance under the Affordable Care Act (ACA) and reside in states that have not adopted Medicaid expansion under the ACA. People within this categorization have incomes above the eligibility limits for Medicaid set by their state of residence but fall below the federal poverty line (FPL), resulting in deficient access to affordable health insurance. As of March 2023^[update], an estimated 1.9 million Americans in 10 states are within the Medicaid coverage gap according to the Kaiser Family Foundation. Approximately 97 percent of this cohort lives in the Southern U.S., with a majority living in Texas and Florida; Texas has the largest population of people in the cohort, accounting for 41 percent of people in the coverage gap.^[2]

Expansion of Medicaid was a key aspect of the ACA when it was signed into law by President Barack Obama in March 2010, supporting the legislation's goal of ensuring universal health care in the U.S. by raising the income threshold for Medicaid eligibility to 138 percent of the FPL among nonelderly adults. States choosing to participate in Medicaid expansion would also have additional Medicaid costs fully covered by the federal government in the first three years of expansion slated to begin in 2014, with a stepwise decrease in the federal government's share to 90 percent in 2020 and thereafter. Opponents of the legislation asserted that the federal government's conditioning of additional funding for Medicaid on adoption of expansion was unconstitutionally coercive. The Supreme Court held in National Federation of Independent Business v. Sebelius that adoption of Medicaid expansion by states was effectively optional, and that states could continue with their preexisting Medicaid requirements without risk of defunding. The decision not to implement Medicaid expansion in some states after the ACA took effect in 2014 led to a "gap" in coverage for residents of those states with incomes too low for subsidized insurance in the ACA's newly established health insurance marketplaces and incomes too high to qualify for the non-expanded Medicaid in their states. Only 24 states adopted Medicaid expansion when ACA initially took effect. As of March 2023^[update], 40 states and the District of Columbia have adopted Medicaid expansion, leaving 10 states that have not.