off the charts
POLICY INSIGHT
BEYOND THE NUMBERS

Rounding Up the Top Five Reasons Congress Should Close the Coverage Gap

More than eight years after the Affordable Care Act’s Medicaid expansion took effect, over 2 million uninsured people still have no pathway to affordable health care coverage because they live in one of the 12 states that failed to adopt the expansion. These states have refused to expand despite significant financial incentives and evidence from expansion states showing improvements in health care access and health outcomes. Over these eight years, millions of uninsured people have fallen into and out of the coverage gap due to high rates of income volatility and frequent coverage loss among low-income households. Thus, the number of people affected by the coverage gap has been far greater than the most recent 2019 estimate of 2.2 million.

For example, Christine Burk of Fayetteville, North Carolina, is uninsured due to the coverage gap. She was recently left with a large bill for her visit to the emergency room, which is her only health care option since she is without coverage. Many people, including Christine, would benefit from having a pathway to affordable health coverage that provides them stable access to health care and greater financial security for themselves and their families.

We’ve excerpted CBPP pieces that point to five of the top reasons Congress should close the coverage gap in the economic package the Senate may consider soon:

Reason #1: Advancing Health and Economic Justice
Closing the Coverage Gap a Critical Step for Advancing Health and Economic Justice
People of color make up about 60 percent of those in the coverage gap, higher than their 41 percent share of the adult, non-elderly population in non-expansion states. This reflects economic, educational, and housing injustices that lead to higher rates of poverty for people of color and over-representation in low-paid jobs that don’t offer employer coverage. Moreover, many of the states that have refused to adopt the expansion have a long history of policy decisions, based on racist views of who deserves to get health services, that restricted access to coverage in the past and continue to do so today. Closing the coverage gap is an important step in undoing the effects of structural racism that continue to affect people’s health and well-being.

Reason #2: Responding to Health Crises
Closing the Coverage Gap Would Improve Black Maternal Health
States that expanded Medicaid under the Affordable Care Act have seen a significant rise in health coverage among women of reproductive age. This has improved their access to preconception and prenatal services that make pregnancy and birth safer for parent and baby. Research also shows Medicaid expansion is associated with reduced rates of maternal death, particularly for Black women. . . . [Non-expansion] states have significantly higher uninsured rates for women of reproductive age than do expansion states. In 2019, 810,000 women of reproductive age with incomes below the poverty line — 29 percent are Black and 33 percent Latina — were uninsured without any pathway to affordable health coverage. Almost all lived in the South, where states generally have not expanded Medicaid.

To Improve Behavioral Health, Start by Closing the Medicaid Coverage Gap
Medicaid expansion has improved access to needed mental health and [substance use disorder] care in states that have expanded. Until the Medicaid coverage gap is closed, however, hundreds of thousands of low-income people with behavioral health needs will continue to lack the care and financial protections that are afforded to people in expansion states. . . . [C]losing the coverage gap is a critical step toward building a more equitable health care system by ensuring that everyone has access to quality behavioral health services regardless of where they live.

Reason #3: Mitigating Coverage Loss Due to the Public Health Emergency Unwinding
Congress Needs to Act Now to Reduce Coverage Losses When Public Health Emergency Ends
Unless Congress acts, people with incomes below the poverty line who lose Medicaid during the unwinding could end up in the coverage gap without an affordable path to coverage. This includes large numbers of young adults who have turned 19 and thus no longer qualify for Medicaid as children, people who received Medicaid during their pregnancy but are past their state’s postpartum eligibility timeline, and parents whose income has risen above their state’s very low income thresholds.

Reason #4: Boosting Financial Resources for Health Care Systems, Especially in Rural Areas
Closing Coverage Gap a Crucial Step for Health Equity in Rural Communities of Color
Most of the funds for closing the coverage gap would go to payments for health care services, reducing uncompensated care and allowing more rural hospitals, safety net hospitals, and community health centers — many of which disproportionately serve people with low incomes and people of color — to stay open and even to provide more services in their communities. Rural hospital closures have been pervasive in non-expansion states. Of the ten states with the most rural hospital closures since 2010, all but two are non-expansion states — and the two that aren’t, Oklahoma and Missouri, only began their expansions in 2021.

Uncompensated Care Costs Fell in States That Recently Expanded Medicaid
Hospitals’ uncompensated care costs fell by $8.6 billion (23 percent) from 2013 to 2015, with states that expanded Medicaid seeing declines several times larger than those that did not. In 2019, uncompensated care costs in expansion states were less than half of those in non-expansion states as a percent of hospital operating expenses. A large body of research has demonstrated that Medicaid expansion reduces hospitals’ uncompensated costs.

Reason #5: Making Progress Toward Achieving Universal Health Coverage
Economic Legislation Should Include Health Policies to Boost Coverage, Ease Strain on Families’ Budgets
It’s critical to avoid going backward on health coverage rates, especially as high inflation is straining families’ budgets. People who have coverage have better access to care and are less likely to go without it because of cost. And affordable coverage can help reduce financial pressures on people struggling to afford other basic needs. . . . Policymakers face an important decision. They should choose to make further progress on affordable health coverage — a lifeline to millions during the pandemic — while reducing financial challenges for families.