The expansion of Medicaid eligibility to nearly all low-income adults is a core component of the coverage provisions in the 2010 Affordable Care Act (ACA). The ACA Medicaid expansion provides a link between new private coverage options available through either Health Insurance Marketplaces or employers and the existing Medicaid program, which previously had many gaps in coverage for adults. Historically, Medicaid eligibility generally was restricted to low income individuals in a specified category, such as children, their parents, the aged, or individuals with disabilities. In most states, adults without dependent children were not eligible for Medicaid. Further, eligibility levels for parents were generally set very low and varied greatly across states. As a result, only 30% of poor nonelderly adults had Medicaid coverage in 2012, compared to 70% of poor children, and uninsured rates for poor adults (42%) were well over twice the national average (18%). The expansion of Medicaid, effective in January 2014, fills in historical gaps in Medicaid eligibility for low income adults and has the potential to extend health coverage to millions of currently uninsured individuals. This expansion essentially sets a national Medicaid income eligibility level of 138% of poverty (about $27,000 for a family of three ) for adults. The expansion was intended to be national and to be the vehicle for covering low income individuals, with premium tax credits for Marketplace coverage serving as the vehicle for covering people with higher incomes. However, the June 2012 Supreme Court ruling made the expansion of Medicaid optional for states, and as of September 2013, 26 states did not plan to implement the expansion. In states that do not expand Medicaid, over five million poor uninsured adults have incomes above Medicaid eligibility levels but below poverty and may fall into a “coverage gap” of earning too much to qualify for Medicaid but not enough to qualify for Marketplace premium tax credits. Most of these people have very limited coverage options and are likely to remain uninsured. This brief describes the coverage gap and presents estimates of the population that falls into this situation.
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