Closing Medicaid Coverage Gap Would Provide Over 1.5 Million Uninsured Adults Path to Affordable Health Coverage

The Affordable Care Act (ACA) expanded access to affordable, comprehensive health coverage for millions of people and has driven the uninsured rate to record lows.^[1] Yet, more than 1.5 million uninsured adults are stuck in the Medicaid “coverage gap,” with no path to affordable health coverage. They have incomes below the federal poverty level (FPL) — too low to qualify for financial help in the ACA marketplaces — yet they don’t qualify for Medicaid because they live in one of the ten states that have not adopted the ACA Medicaid expansion.^[2]

People in the coverage gap are racially and ethnically diverse; 64 percent are people of color, compared to 44 percent of the total U.S. population (see Figure 1). They range from ages 19 to 64 and include working families and parents caring for children. Adults in the coverage gap are also disproportionately likely to be self-employed, to have a disability, and to live in rural areas. About 17 percent of working adults in the coverage gap are employed in their own business, professional practice, or farm, compared to 9 percent of other working adults. Some 15 percent of adults in the coverage gap have a disability, compared to 11 percent of other adults. And 16 percent are in rural areas, compared to 13 percent of other adults. (See Figure 2.)

Closing the coverage gap would:

• improve people’s health and save lives;
• reduce medical debt and increase people’s financial security;
• reduce racial and ethnic disparities in health coverage;
• provide a source of coverage to low-income workers and their families who lack access to coverage through an employer;
• improve coverage and access to care for children whose parents are in the coverage gap;
• allow people with disabilities to obtain coverage based on their income without having to meet strict Supplemental Security Income eligibility criteria; and
• support state budgets and health care providers, including those in rural areas, which are especially likely to benefit from Medicaid expansion.^[3]

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The remaining non-expansion states should close the coverage gap by adopting Medicaid expansion. For states that continue to refuse to adopt expansion, Congress should close the coverage gap by extending coverage to individuals with low incomes in those states.

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Appendix I: Characteristics of Uninsured Adults in the Coverage Gap

Appendix II: Data and Methods

We use the Census Bureau’s 2023 American Community Survey (ACS), combined with state Medicaid eligibility rules, to estimate the coverage gap population in the ten states that have not enacted the ACA’s Medicaid expansion.^[4] The coverage gap population is defined as uninsured adults aged 19-64 with incomes below the federal poverty level and who are ineligible for Medicaid because their states did not adopt the expansion. This includes parents whose incomes are above the parent eligibility limits and adults without children who wouldn’t be eligible at any income level.

Medicaid and the marketplace have different rules for defining income and family units for the purposes of gaining coverage. These categories of income and family units (known as “health insurance units,” or HIUs) are not directly available in the ACS data and must be estimated. To assess income eligibility, we group individuals into two types of HIUs: Medicaid HIUs and marketplace HIUs. For each type of HIU, we apply each program’s rules for counting modified adjusted gross income for the purposes of eligibility. Our methodology for grouping into HIUs and counting income is based on ACS data and assumptions regarding family relationships, household composition, and tax filing rules and behavior.

Our coverage gap estimates do not include populations that are already eligible for Medicaid or would not be eligible even if their states expanded. For example, we impute immigration status, broadly following methods used by KFF.^[5] We develop a model predicting lawful immigration status using the second wave of the 2008 Survey of Income and Program Participation. Based on this model, we generate ten statistical imputations in the ACS, controlling to 2022 Center for Migration Studies estimates of the population without a lawful immigration status and estimated undercounts in the ACS.^[6] We do not include the estimated population without a lawful immigration status in our coverage gap estimates because under existing rules, this group would not gain Medicaid eligibility if their states adopted the expansion.

We define people as having a disability if they meet at least one of the six categories as defined by the Census Bureau: blind or with serious difficulty seeing; deaf or with serious difficulty hearing, serious cognitive difficulty, ambulatory difficulty (difficulty with a basic physical activity such as walking or reaching), difficulty with self-care such as dressing or bathing, or difficulty doing basic activities outside the home alone. We identify people living in rural areas using a crosswalk of Public Use Microdata Areas in the Census to metropolitan statistical areas.^[7]