Medicaid expansion has become a key political issue under the Affordable Care Act (ACA) — commonly known as Obamacare.
In 2012, the Supreme Court ruled to leave decisions up to states on whether to adopt the ACA's expansion. In the decade since, 10 states still haven’t expanded Medicaid. That translates to more than 2 million individuals without healthcare coverage in a “coverage gap” that the Supreme Court decision created.
Here's how the gap happens: To qualify for Medicaid, an individual cannot make more than 138% of the federal poverty level, an income currently equivalent to $20,120. However, that's only under the ACA's expansion. The threshold for subsidies under traditional insurance plans in the Affordable Care Act is incomes above 100% of the federal poverty level.
That has left those 2 million-plus people in a situation where they are both living in poverty but also ineligible for financial assistance.
“The plight of these people — it’s just terrible,” Sherry Glied, dean and professor at Robert F. Wagner Graduate School of Public Service at New York University, told Yahoo Finance. “Imagine that you’re in a state where somebody says, 'OK, you can work another 10 hours this week, and if you work another 10 hours, you’re going to lose your health insurance coverage.' That’s ridiculous.”
A new report from the Commonwealth Fund, cowritten by Glied, highlights how the majority of these individuals in the coverage gap are people of color and people living in the South, where most of the non-expansion states are located. Previous studies have found that the size of the Black population in the state is predictive of whether that state expands Medicaid or not. States with particularly large Black populations have been the ones that haven't, Glied said.
“This is a particularly disadvantaged population because they have no recourse,” Glied said. “There’s nowhere for them to get health insurance. There’s no way they could possibly buy health insurance in the open market. They don’t have enough money and they don’t qualify for Medicaid. And this is the group that’s called the ‘gap population.’”
'A strong political stance'
One of the most notable impacts of Medicaid expansion was substantially increasing health insurance coverage rates.
According to the report, which compared outcomes for people who potentially fall in the coverage gap in comparable states that did and didn’t expand Medicaid, insurance coverage rates among parents in expansion states increased by 15.3% — and among nonparents by 10.5%.
“These improvements in coverage led to reductions in the rate at which financial considerations impeded access to care,” the report said.
Increased coverage meant fewer people avoided seeking medical care due to cost. It also led to higher rates of routine checkups and more regular contact with primary care physicians.
More access to and affordability of preventive care led to increased use of these services, the report also found. For instance, according to the report, parents were 2.8% more likely to get a flu shot, while individuals were 6.7% more likely to have had a mammogram. Individuals in expansion states were 1.9% more likely to take medication to treat high blood pressure.
While studies have shown that access to preventive care can help financially, many state governments are still resistant to expanding Medicaid, which Glied attributes to partisanship, especially since the federal government covers up to 90% of Medicaid costs.
“This is really just these states making a political argument,” Glied said. “The movement has been very gradual [but] states [will] realize that the Affordable Care Act is here to stay."
'A challenging conundrum'
Medicaid expansion has also become a ballot issue for voters. Notably, red states like Arkansas and Nebraska saw voters overwhelmingly support expansion in recent years. Ten states led by Republican governors have continued to reject federal funding for the program.
Glied said it may simply take more time for more states to fully get on board.
“What I think will happen in the near future is that state legislators will realize the Affordable Care Act is here to stay and that their residents are paying federal taxes that are being used to fund Medicaid expansion in California and New York and Massachusetts and other places they don’t like very much, but not in their own state,” Glied said.
Coverage could become even more of a challenge after the expiration of the Families First Coronavirus Response Act, a pandemic-era law that created continuous enrollment in Medicaid in all states. That program expired on March 31, 2023.
For instance, Glied said, “if you’re in Texas and your income fell below the threshold, now you’re going to get kicked off. So we’re going to see in the non-expansion states that when the continuous coverage provision comes to an end, a lot of those people are going to become uninsured, whereas in the expansion states, we don’t really expect to see very many of them become uninsured.”
Data has shown that Medicaid expansion improves insured rates across all racial demographics, nearly doubling across every category. But Glied noted the "challenging conundrum" for the Biden administration: It's already paying for much of the cost of Medicaid expansion, and Republican governors aren't likely to give in politically.
“There’s a real question about what you do to entice these states that didn’t take this really good offer," Glied said. Do you want to offer them even more? That doesn’t seem very right or fair. So it’s a challenging conundrum of how to get those people covered if their states don’t want to do it.”
Adriana Belmonte is a reporter and editor covering politics and healthcare policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at adriana@yahoofinance.com.
