Medicaid Expansion: New Insight on Who Might Gain Coverage in the States

The June 2012 Supreme Court ruling on the Affordable Care Act put into the states’ hands the decision to expand Medicaid eligibility to all adults with incomes below 138 percent of the federal poverty level. Currently, few states cover non-disabled, non-pregnant adults up to this income level and even fewer cover adults without dependent children regardless of their poverty level.

The Urban Institute released this month an analysis of the approximately 15.1 million adults who could gain Medicaid eligibility if states exercise their expansion option. Nationally, 52 percent of the group is under age 35 and 53 percent are male.  More than half are white (55 percent), while African Americans and Hispanics make up 19 percent each with the remaining 7 percent identifying as other or multiple races and ethnicities.

The Urban Institute analysis provides the state-by-state estimations of the numbers of individuals to whom states could extend Medicaid health insurance coverage in the CSG chart below:

Note on*Vermont: Size of sample data does not allow a calculation beyond < 1 million individuals.

Source: Kenney, Genevieve, et. al. "Opting in to the Medicaid Expansion under the ACA: Who Are the Uninsured Adults Who Could Gain Health Insurance Coverage." Urban Institute, August 2012.

Together, the three states of California, Texas and Florida account for nearly one-third of the potentially eligible population – 4.9 million adults, or 32.6 percent of all new eligible. Another six states – Georgia, Illinois, Michigan, North Carolina, Ohio and Pennsylvania – are each estimated to have more than half a million adults eligible under the expansion option. These nine states contain more than half (55.6 percent) the potential Medicaid expansion population.

The Congressional Budget Office released an update of budget estimates for the Affordable Care Act after the Supreme Court ruling. While the CBO did not speculate which states would or would not expand coverage, they lowered their estimates of Medicaid and CHIP outlays for the ACA for 2012-2022 from $931 billion to $642 billion. The CBO also increased its estimation of exchange subsidies from $808 billion to $1,017 billion, reflecting the assumption that less Medicaid expansion will qualify some adults for subsidies within the health insurance exchanges. Ironically because of their low income, some individuals’ health insurance costs will still be unaffordable under the exchanges and neither subsidies nor penalties will apply -- and they will remain uninsured.

It remains to be seen whether states accept the favorable federal match “sweetener.” For the first three years, 2014-2017, the federal government will pay 100 percent of the costs for newly eligible Medicaid enrollees. The federal match rate gradually decreases until it reaches 90 percent in 2020 and beyond. The Center on Budget and Policy Priorities estimates the federal government will pick up 93 percent of the costs of Medicaid expansion between 2014-2022.

Some state policymakers are concerned about committing any additional state revenues to Medicaid, tying their hands in other program areas.  Some have expressed skepticism that the federal government can afford to live up to the 90-10 match promise in the long run.

To date, governors in five states are on the record rejecting the expansion option -- Florida, Louisiana, Mississippi, South Carolina and Texas. Other governors have publicly endorsed the expansion for their states -- California, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Vermont and Washington.

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