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What is Medicaid expansion?
Posted: March 07, 2022
Last updated date: December 02, 2022
Medicaid expansion was part of the Affordable Care Act (ACA). The goal of the ACA was to help make health insurance more affordable for people with low incomes. President Obama signed the ACA into law in 2010.
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Who is covered by Medicaid expansion?
Medicaid expansion gave states the chance to provide Medicaid coverage to people who earn up to 138% of the federal poverty level (FPL). FPL is a measure of income. It’s the cutoff to qualify for Medicaid and other government benefits. The federal government updates the FPL each year. For 2023, the FPL is $13,590 for individuals and $27,750 for a family of 4.
Medicaid expansion opened up access to Medicaid mainly for these 2 low-income groups:
- Adults who don’t have any children
- People who, in the past, earned too much to qualify for state Medicaid
How is Medicaid expansion funded?
Each state runs its own Medicaid program, but the federal government has rules that all states must follow. In exchange for following these rules, the federal government also provides states at least half of the funding needed to run the Medicaid program.
What about costs that are specifically related to Medicaid expansion? For the first few years, the federal government paid 100%, or the full amount of the cost. In the years since, that share has been gradually reduced. As of 2020 — and in every year going forward — the federal government will now pay 90%. That means for every extra dollar that a state spends on Medicaid expansion, the federal government will cover 90 cents of the cost.
Dual Special Needs Plans provide extra help to those who need it
Why don’t all states have Medicaid expansion?
In 2012, the Supreme Court of the United States ruled that the federal government could not force states to expand Medicaid under the ACA. That’s because it would cost money for states to cover more people under Medicaid. As a result, each state could choose whether or not to expand their Medicaid program. Currently, 38 states plus Washington, D.C. have adopted Medicaid expansion and 12 states have not.1
Have you heard of the Medicaid coverage gap? It’s a situation that impacts a certain group of people in states that chose not to expand Medicaid. These people earn too much to qualify for Medicaid in their state. But they still can’t afford the cost for getting health coverage with an individual or family marketplace (ACA) plan. Roughly 2.2 million people fall into this Medicaid coverage gap.2
What has been the impact of Medicaid expansion?
The Menges Group is a national consulting firm that’s focused on finding ways to better serve high-risk populations. The Menges Group did a study to compare states that adopted Medicaid Expansion with states that did not. Key findings from the Menges Group study,3published in August 2021, include:
- More than 9 million people who would otherwise be uninsured got coverage through Medicaid Expansion.
- From 2013–2019, the share of Medicaid costs that states pay increased less in states that expanded Medicaid compared to those that did not (19.5% versus 26.4%).
- Medicaid expansion helped lower the COVID-19 death rate among people aged 18–64.
- Hospital revenues appear to have increased considerably in states with Medicaid expansion.
How does Medicaid expansion benefit those with special needs?
Medicaid expansion made it possible for more people to get health care coverage through Medicaid. That includes a certain number of people who are also eligible to get Medicare benefits. And in that case, they’d most likely also qualify for a Dual Special Needs Plan (or dual-eligible health plan). This is a type of health insurance plan for people who have both Medicare and Medicaid. These people are “dual-eligible” because they’re eligible to receive Medicare benefits as well as Medicaid benefits.
Dual Special Needs Plans are Medicare Advantage plans that can provide extra help to those who need it. That may be because of income, disabilities, age and/or health conditions. A Dual Special Needs Plan works together with your Medicaid health plan. You’ll keep all your Medicaid benefits. Most dual health plans also give you more benefits and features than you get with Original Medicare.* All with as low as a $0 plan premium. Learn more about dual health insurance plan benefits.
1 Status of State Medicaid Expansion Decisions: Interactive Map (KFF, June 21,2022), (accessed August 16, 2022).
2 The coverage gap: Uninsured poor adults in states that do not expand Medicaid (KFF, January 21, 2021), (accessed December 14, 2021).
3 Assessment of Medicaid Expansion’s Impacts (The Menges Group, August 2021) (accessed July 13, 2023).
*Benefits and features vary by plan/area. Limitations and exclusions apply.
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