Medicaid Expansion Under the ACA: A State-by-State Guide

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Medicaid is a cornerstone of the U.S. health safety net, a joint program funded by the federal government and individual states.

It provides essential health coverage to millions of Americans, focusing on eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities. While the federal government sets broad guidelines, each state administers its own Medicaid program, leading to variations in eligibility and services.

In 2010, the landscape of American health care underwent a significant transformation with the enactment of the Patient Protection and Affordable Care Act (ACA), often referred to as the ACA or Obamacare. This comprehensive health reform law aimed to address several challenges within the U.S. healthcare system. One of its central objectives was to make affordable health insurance available to a greater number of people.

This article explores how the ACA intended to expand Medicaid, explains why this expansion did not happen uniformly across the country, identifies which states have adopted the expansion as of mid-2025, and discusses the implications for Americans seeking health coverage.

The ACA’s Plan for Medicaid Expansion

The Affordable Care Act, as initially designed, envisioned a significant nationwide expansion of Medicaid eligibility. The law aimed to extend coverage to nearly all non-elderly adults (ages 19 through 64) who had incomes at or below 138% of the Federal Poverty Level (FPL).

The Federal Poverty Level, or FPL, is a measure of income issued annually by the Department of Health and Human Services. FPL guidelines are used to determine eligibility for certain programs and benefits, including savings on Marketplace health insurance, and Medicaid and CHIP coverage. For 2025, 138% of the FPL equates to an annual income of approximately $21,597 for an individual.

This expansion was particularly significant because, historically, Medicaid eligibility for adults in most states was largely restricted to specific categories, such as parents with very low incomes, pregnant women, individuals with disabilities, or the elderly. Childless adults, regardless of how low their income was, generally did not qualify for Medicaid in most states prior to the ACA. The ACA’s expansion provision was intended to cover millions of these previously uninsured adults.

Federal Funding Incentives

To encourage states to adopt this expansion, the ACA included a substantial financial incentive involving the Federal Medical Assistance Percentage (FMAP). The FMAP represents the share of a state’s Medicaid costs that the federal government pays. Under the standard system, this percentage varies by state based on its average per capita income relative to the national average, with a statutory minimum of 50% federal funding. For the population newly eligible under the ACA expansion, however, the law offered a greatly enhanced FMAP.

Specifically, the federal government committed to covering 100% of the costs for the newly eligible expansion group for the first three years (2014-2016). This federal share was then scheduled to phase down gradually, eventually settling at 90% for 2020 and all subsequent years. This 90% federal contribution is significantly higher than the regular FMAP rates states receive for traditional Medicaid populations. The purpose of this enhanced funding was clear: to make expanding Medicaid financially appealing for states by ensuring the federal government bore the vast majority of the cost for covering the new population.

The structure of the ACA was built on the assumption that all states would adopt this expansion. This was intended to create a seamless continuum of coverage: individuals earning up to 138% FPL would be covered by Medicaid, while those with incomes between 100% and 400% FPL who lacked other affordable coverage could receive subsidies (premium tax credits) to purchase private insurance through the newly created Health Insurance Marketplaces.

Why Didn’t All States Expand? The Supreme Court’s Role

Despite the ACA’s design and financial incentives, Medicaid expansion did not become a universal reality. Shortly after the law’s passage, it faced numerous legal challenges. The most significant of these culminated in the 2012 Supreme Court case National Federation of Independent Business v. Sebelius.

The Constitutional Challenge

A central argument in this case, brought by 26 states and the National Federation of Independent Business, concerned the Medicaid expansion provision. The plaintiffs contended that the ACA’s mechanism for ensuring state participation was unconstitutionally coercive. The law stated that if a state chose not to expand its Medicaid program as outlined in the ACA, the federal government could potentially withhold all of its existing federal Medicaid funding. Since federal Medicaid funds constitute a substantial portion of state budgets – often over 10 percent of a state’s total budget – the challengers argued that this threat effectively left states with no real choice but to comply with the expansion, infringing on state sovereignty.

The Supreme Court’s Decision

In its June 2012 ruling, the Supreme Court addressed this challenge directly. A majority of the justices agreed with the plaintiffs that the ACA’s enforcement mechanism for the Medicaid expansion was unduly coercive. Chief Justice John Roberts, writing for the Court on this point, characterized the threat of withdrawing all existing Medicaid funds as “economic dragooning” that essentially amounted to a “gun to the head” of the states, leaving them no legitimate option to refuse the expansion. The Court reasoned that while Congress can attach conditions to federal funds offered to states (using its Spending Clause power), this power is limited and relies on the state’s voluntary and knowing acceptance of the terms. The sheer magnitude of the potential loss of all existing Medicaid funding, the Court found, crossed the line from encouragement into unconstitutional compulsion.

However, the Court’s decision did not invalidate the Medicaid expansion provision itself. Instead, the remedy applied was to limit the enforcement power of the federal government. Specifically, the Court ruled that the Secretary of Health and Human Services could not withhold a state’s existing Medicaid funds if the state declined to participate in the ACA’s expansion. This crucial modification fundamentally altered the landscape: while the enhanced federal funding (90% FMAP) for expansion remained available, the decision of whether or not to expand Medicaid coverage to adults up to 138% FPL became effectively optional for each state.

Long-Term Implications

The NFIB v. Sebelius ruling represented a significant moment in the balance of power between the federal government and the states. The ACA originally intended Medicaid expansion to be a uniform, national policy floor, heavily subsidized by federal dollars to ensure broader coverage for low-income adults. By finding the enforcement mechanism unconstitutionally coercive and making expansion optional, the Supreme Court directly countered this design.

This decision shifted significant authority back to the states, allowing individual state political and fiscal considerations, rather than a national standard based on income, to determine access to Medicaid for a large group of low-income adults. This created the conditions for the geographic disparities in coverage that exist today and underscored the ongoing tensions within American federalism regarding national policy goals versus state autonomy.

The long-term consequence of this judicial intervention is the persistence of the “coverage gap” in non-expansion states and the continuous political debates surrounding expansion, demonstrating how court decisions can reshape legislation and lead to uneven impacts on citizens’ access to essential services, directly contrary to the original legislative intent. The ruling also established important limits on Congress’s ability to use its spending power to induce state action.

Which States Have Expanded Medicaid?

Following the Supreme Court’s 2012 decision, the choice to expand Medicaid rested with each individual state. As of mid-2025, the landscape reflects these state-level decisions: 41 states (including the District of Columbia) have adopted the ACA Medicaid expansion, while 10 states have not. There is no deadline for states to choose to expand Medicaid.

The table below provides a snapshot of each state’s Medicaid expansion status and implementation date, where applicable.

Status of State Medicaid Expansion Decisions (As of July 2025)

Non-Expansion States

The 10 states that have not adopted the Medicaid expansion as of July 2025 are:

• Alabama
• Florida
• Georgia
• Kansas
• Mississippi
• South Carolina
• Tennessee
• Texas
• Wisconsin*
• Wyoming

*A Note on Wisconsin: Wisconsin presents a unique case. While it has not adopted the ACA expansion to 138% FPL and therefore does not receive the 90% enhanced federal match, it did expand coverage to childless adults with incomes up to 100% FPL using a federal waiver prior to the ACA. Because individuals with incomes between 100% and 138% FPL are eligible for subsidized coverage on the ACA Marketplace, Wisconsin does not have a “coverage gap” in the same way as the other nine non-expansion states. However, it is still classified as a non-expansion state under the ACA framework because it hasn’t adopted the 138% FPL threshold with the associated enhanced funding.

Varied Paths to Expansion

The path to expansion has varied significantly among the states that have adopted it. While over half implemented the expansion at the earliest opportunity in January 2014, others have joined gradually over the subsequent decade.

Adoption methods have included standard legislative processes, executive orders by governors, and direct votes by citizens through ballot initiatives in states like Idaho, Maine, Missouri, Nebraska, Oklahoma, South Dakota, and Utah. Some states implemented the standard expansion, while others sought Section 1115 waivers from the federal government to modify the program, for instance, by using Medicaid funds to purchase private insurance (premium assistance) or by attempting to add work requirements as a condition of eligibility (though federal approval for work requirements has faced legal and administrative challenges).

Current Expansion Landscape

The expansion landscape remains dynamic. North Carolina and South Dakota were the most recent states to implement expansion, both in 2023. Debates continue in several non-expansion states.

For example, Mississippi saw significant legislative debate in 2024, though a bill ultimately failed, with leadership aiming to revisit the issue in 2025. Kansas’s governor introduced expansion legislation again in early 2025, facing familiar legislative hurdles.

Georgia operates a limited partial expansion (“Pathways to Coverage”) with work requirements and very low enrollment, while bipartisan legislation for a broader, private-option expansion (SB 50) was introduced in 2025 but faces an uphill battle.

Wisconsin continues its unique approach, with ongoing political divisions preventing full expansion despite potential fiscal benefits. Wyoming lawmakers have repeatedly rejected expansion proposals, most recently in 2023.

Adding another layer of complexity, several expansion states have enacted “trigger laws,” which could automatically end or require modifications to their expansion programs if the federal government reduces the 90% enhanced matching rate.

The varied timing and methods of adoption, along with the persistent debates in non-expansion states and the presence of trigger laws, underscore that Medicaid expansion is not a single past event but an ongoing policy process. The Supreme Court’s decision making expansion optional fundamentally shifted the dynamic, making state-level political calculations, fiscal concerns, public opinion (sometimes expressed via ballot measures), and federal actions (like the temporary enhanced funding in the American Rescue Plan Act or potential future FMAP reductions) key drivers of policy.

This reality highlights the fragmented nature of U.S. health policy, where access to essential coverage for low-income adults hinges significantly on the political and economic environment of their specific state, leading to substantial geographic inequities in healthcare access.

The “Coverage Gap” in Non-Expansion States

The decision by ten states not to expand Medicaid under the ACA has created a significant hole in the health insurance safety net known as the “coverage gap”. This gap affects adults in those states (excluding Wisconsin, due to its unique pre-ACA waiver coverage up to the poverty line) who earn too much to qualify for their state’s existing, often very restrictive, Medicaid program, but too little to qualify for financial assistance (premium tax credits) to buy private health insurance on the ACA Marketplace.

This situation arises directly from the Supreme Court’s ruling in NFIB v. Sebelius. The ACA was structured with the expectation that Medicaid would cover everyone up to 138% FPL. Consequently, the law only made Marketplace subsidies available starting at 100% FPL, assuming those below that threshold would be eligible for Medicaid. When the Court made expansion optional, states that chose not to expand left their poorest adult residents without an affordable coverage pathway.

As of early 2025, an estimated 1.4 million uninsured adults fall into this coverage gap across the ten non-expansion states. This number has decreased from earlier estimates as states like North Carolina and South Dakota have recently expanded Medicaid, allowing many of their residents to escape the gap.

Who Falls into the Coverage Gap?

The population caught in the coverage gap has distinct characteristics:

• Income: By definition, everyone in the coverage gap has an income below 100% of the FPL (approximately $15,060 for an individual in 2024). In many non-expansion states, the income limit for parents to qualify for Medicaid is drastically lower – the median is around 38% FPL, and childless adults are typically ineligible altogether.
• Location: The coverage gap population is heavily concentrated in the Southern United States, where most non-expansion states are located. Texas, Florida, and Georgia alone account for nearly three-quarters of all people in the gap.
• Race and Ethnicity: People of color are disproportionately affected. Approximately 60% of individuals in the coverage gap are people of color, a significantly higher percentage than their representation in the general population of non-expansion states (49%) or the U.S. overall (44%). This includes large shares of Black and Hispanic individuals.
• Work Status: The majority of adults in the coverage gap are connected to the workforce. Nearly six in ten live in a family with at least one worker, and over 40% are employed themselves. They typically hold low-wage jobs in sectors like service, retail, and construction, which often do not provide affordable employer-sponsored health insurance. Common occupations include cashiers, cooks, servers, construction laborers, and janitors.
• Family Status: Adults without dependent children make up the largest share (about 80%) of those in the coverage gap, reflecting their historical exclusion from Medicaid eligibility in most states. However, a substantial number (around 24%) are parents who earn too little for Marketplace subsidies but too much for their state’s stringent Medicaid parental eligibility limits.
• Health and Disability Status: While many report good health, a significant minority (around 16% to 19%) report being in only fair or poor health or have a functional disability that may limit their ability to work. These individuals may not meet the strict criteria required to qualify for Medicaid based on disability alone, leaving them uninsured despite their health needs. Older adults nearing retirement age (55-64), who often have increasing health needs, also constitute a notable portion (17%) of the gap population.

Inequality and the Coverage Gap

The existence and demographics of the coverage gap reveal more than just a flaw in policy implementation; they highlight how state-level political decisions can directly reinforce systemic inequities. The fact that the gap exists only in non-expansion states, affects only those below the poverty line, and disproportionately impacts people of color, low-wage workers, and residents of the South demonstrates a direct link between state policy choices and the exacerbation of existing disparities.

These populations often face greater historical and ongoing barriers to economic opportunity, education, and healthcare access. The denial of affordable health coverage through the rejection of Medicaid expansion falls most heavily on these already marginalized groups, hindering their health, financial stability, and overall well-being. Addressing the coverage gap, therefore, represents a critical opportunity to advance health equity and mitigate long-standing systemic disadvantages.

Why Does Medicaid Expansion Matter? Key Impacts

Over the decade since the ACA’s major coverage provisions took effect, a large body of research has compared the experiences of states that expanded Medicaid with those that did not. These studies consistently document significant impacts across several key areas: health insurance coverage rates, access to care and health outcomes, and state budgets and economies.

Impact on Health Insurance Coverage

• Reduced Uninsured Rates: The most direct impact of Medicaid expansion has been a dramatic reduction in the number of uninsured individuals, particularly among low-income adults. States that expanded Medicaid saw their uninsured rate for non-elderly adults with low incomes plummet by more than half between 2013 (before expansion took effect) and 2022, falling from 35% to 15%. In contrast, non-expansion states saw only a modest decline in this group, from 44% to 30%, leaving their uninsured rate double that of expansion states.
• Narrowed Racial Disparities: Medicaid expansion has played a crucial role in reducing long-standing racial and ethnic disparities in health coverage. Between 2013 and 2022, the gap in uninsured rates between white adults and Black adults shrank by 67% in expansion states, compared to only 47% in non-expansion states. Similarly, the gap between white adults and Hispanic adults narrowed by 48% in expansion states, versus just 30% in non-expansion states.
• Increased Children’s Coverage: Expanding Medicaid coverage to parents often leads to increased enrollment among their children who were already eligible for Medicaid or the Children’s Health Insurance Program (CHIP) but not enrolled. This phenomenon, known as the “welcome mat” or “spillover” effect, contributes to lower uninsured rates among children in expansion states compared to non-expansion states.

Impact on Access to Care and Health Outcomes

• Improved Access to Care: Research consistently shows that gaining Medicaid coverage translates into better access to healthcare services. Studies indicate that expansion led to increased use of primary care (having a personal doctor), preventive services (like check-ups, cancer screenings, and cholesterol tests), dental care, and necessary medications. Individuals in expansion states were less likely to report forgoing needed medical care due to cost and showed reduced reliance on emergency rooms for non-emergency care.
• Better Health Outcomes: Evidence increasingly links Medicaid expansion to tangible improvements in health:
  • Self-Reported Health: Individuals gaining coverage often report improvements in their overall health status.
  • Chronic Disease Management: Expansion is associated with better management of chronic conditions such as diabetes, heart disease, hypertension, and asthma, likely due to improved access to regular care and medications.
  • Early Disease Detection: Studies show links between expansion and earlier diagnosis and treatment of serious conditions, including certain types of cancer (like breast cancer), which can significantly improve prognosis.
  • Behavioral Health: Expansion has improved access to care and medications for individuals with mental health conditions (like depression) and substance use disorders, including opioid use disorder.
  • Reduced Mortality: Perhaps most significantly, multiple studies associate Medicaid expansion with reductions in mortality. These include lower death rates overall for certain age groups, as well as reduced mortality from specific conditions like cardiovascular disease, end-stage renal disease, and certain cancers. Expansion has also been linked to lower maternal mortality rates. A landmark study estimated that expansion saved the lives of at least 19,200 adults aged 55-64 between 2014 and 2017, while state decisions not to expand led to an estimated 15,600 premature deaths in that same group over the same period.

Impact on State Budgets and Economies

• State Budget Effects: Despite requiring states to eventually cover 10% of the cost for the expansion population, studies have found that Medicaid expansion often resulted in net savings or minimal costs for state budgets. This is partly because the generous 90% federal match allowed states to shift some individuals who would have been covered under traditional Medicaid (with a lower federal match rate, typically 50-77%) into the expansion group, generating state savings. Furthermore, expansion reduced state spending in other areas, such as state-funded programs for the uninsured, behavioral health services, and healthcare costs within the corrections system. Some analyses found the net fiscal impact on states to be positive.
• Reduced Uncompensated Care: By significantly increasing the number of insured residents, Medicaid expansion dramatically reduced the amount of uncompensated care delivered by hospitals and clinics. This improved the financial stability of healthcare providers, particularly rural hospitals which often operate on thin margins and serve populations with higher rates of uninsurance. Data from FY2020 showed uncompensated care costs averaged 2.7% of operating expenses for hospitals in expansion states, compared to 7.3% in non-expansion states.
• Broader Economic Benefits: The influx of federal dollars associated with expansion has been shown to stimulate state economies. Documented benefits include job growth (particularly in the healthcare sector), increased state tax revenues resulting from heightened economic activity or specific provider/plan assessments, and improved financial security for individuals through reduced medical debt and fewer bankruptcies related to medical costs.

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