Not everyone in the United States has access to the same health coverage options, and a big reason for that comes down to one decision each state makes: whether or not to expand Medicaid under the Affordable Care Act. If you are shopping for health insurance or trying to figure out why your neighbor qualifies for different coverage than you, this article breaks it down in plain terms.
What Is Medicaid Expansion?
The ACA, passed in 2010, gave states the option to expand their Medicaid programs to cover more low-income adults. Before expansion, Medicaid had strict eligibility rules that left many working adults without any affordable coverage option. Under expansion, states can cover adults who earn up to 138 percent of the federal poverty level (FPL). For 2024, that works out to roughly $20,120 per year for a single person.
The federal government covers the majority of the cost for expansion populations, currently paying 90 cents of every dollar spent on newly eligible enrollees. Despite this, not every state has chosen to participate.
Which States Have Expanded and Which Have Not
As of 2024, the majority of states and Washington D.C. have adopted Medicaid expansion. However, a handful of states have not. The states that have not expanded Medicaid include:
- Texas
- Florida
- Georgia (partial expansion only)
- Wyoming
- Kansas
- Wisconsin (covers some adults but not full expansion)
This is not a permanent list. States can choose to expand at any time, and several have done so in recent years through ballot initiatives or legislative action. It is worth checking the current status for your specific state, as policies can and do change.
How This Affects ACA Marketplace Enrollees
The gap between Medicaid expansion and non-expansion states creates what is often called the coverage gap. Here is how it works:
- ACA marketplace subsidies are available to people who earn between 100 percent and 400 percent of the FPL (and above, thanks to recent legislation).
- In expansion states, people below 138 percent FPL are directed to Medicaid, which is typically free or very low cost.
- In non-expansion states, people below 100 percent FPL may not qualify for Medicaid AND may not qualify for marketplace subsidies, leaving them with no affordable option at all.
If you live in a non-expansion state and your income falls below the poverty line, you could find yourself in this gap with limited options. On the other hand, if you live in an expansion state and your income is low, you may qualify for Medicaid rather than a marketplace plan, which can save you significant money each month.
Why This Matters When You Are Shopping for Coverage
When you apply through HealthCare.gov or your state marketplace, your eligibility is automatically checked against both Medicaid and marketplace plans based on your income and state. Understanding your state's expansion status helps you:
- Know what to expect before you apply
- Understand why you may be directed toward Medicaid instead of a private plan
- Recognize if you might fall into the coverage gap
- Explore other options like community health centers if you are uninsured
A licensed broker can also help you understand your specific situation and walk you through whatever options are available in your state.
Practical Takeaway: Before you start shopping for a health plan, look up whether your state has expanded Medicaid. If it has, and your income is below 138 percent FPL, Medicaid may be your best and most affordable option. If your state has not expanded, and your income is very low, talk to a broker or navigator who can help you find any available resources in your area.