Medicaid is the federal government health insurance program for people in poverty. Before the Affordable Care Act (ACA) individuals qualified for this program if they lived at about 64% of the federal poverty level. In 2023 the federal poverty level is $13,590 for an individual. The ACA allowed states to expand eligibility for Medicaid to 138% of the federal level (about $18,754 for a single individual in 2023).
To date, forty states have expanded Medicaid. The states that did not adopt Medicaid are: Alabama, Florida, Georgia, Kansas, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming. South Dakota has adopted but not implement Medicaid expansion.
The American Rescue Plan Act (ARPA) of 2021 provided financial incentives for expanding Medicaid. The coronavirus pandemic adversely affected health outcomes through lack of access to healthcare and increased mortality. Coverage options for many low-income adults are limited in non-expansion states.
A 2020 national study found that expansion was associated with a 3.65 decrease in mortality not due to drug overdose. The study showed that expansion was significantly associated with declines in mortality for certain chronic diseases such different types of cancer, cardiovascular disease and liver disease. Studies also show decreased maternal mortality where Medicaid was expanded.
Expanded Medicaid also shows improvements in access to care and outcomes related to substance use disorder as well as other mental healthcare.
For the states that did not expand coverage, Medicaid eligibility remains limited. Adults who fall into a coverage gap have incomes above their state’s eligibility for Medicaid but are below the poverty line for subsidies through the ACA marketplace. Because the ACA envisioned all low income people receiving coverage through Medicaid, it does not provide financial assistance to people below poverty for other coverage. More than two million poor uninsured adults fall into the coverage gap.
Medicaid Expansion has positive outcomes. First, expansion provides coverage to millions of uninsured families and adults. Second, the federal government covers 90% of the cost of the expansion. Third, budget data from expansion states show that even with the additional 10% of costs, Medicaid expansion offset other costs provided by the state such as public clinics, mental health facilities and public hospitals. Fourth, additional federal spending has a positive economic effect on expansion states; such as increases in employment, income and consumption. Finally, expansion states showed improvement in mortality rates.