When the “Affordable Care Act” was designed, the legislators envisioned the expansion of the Medicaid program to all Americans with household incomes up to 138% of the “Federal Poverty Level” (FPL). Literally the law expands the Medicaid coverage up to 133% of FPL but it has an income calculation equation that does not include the top five percentage points.
The law required states to markedly expand the Medicaid coverage in order to continue the transfer of federal funds to match their funding. The federal government would pay the full cost of the expansion for the first three years (2014 through 2016) and the states would begin to pay a small amount that would eventually reach 10% of the total cost by 2020. In 2012, the Supreme Court allowed the states to voluntarily decide whether to expand it or not.
In the nineteen states, including Florida, that have decided not to expand the Medicaid program, the eligibility is quite limited: the median income for parents in 2016 is 44% of the FPL or an annual income of aprox.US 8,800 a year for a family of three and childless adults are not eligible for benefits. In those states that do not expand Medicaid, many adults fall into a “Coverage gap” of having incomes above the eligibility limits but below the lower limit to qualify for the Marketplace premium tax credits set by Obamacare.
Even though the individuals trapped in the coverage gap are spread in all states, 90% of them live in the South (25% in Texas, 20% in Florida, 11% in Georgia and 8% in North Carolina) where eligibility requirements are high. Given that Minorities are more likely than Whites to live in families with low incomes, they are disproportionately represented in the coverage gap. Nearly half of them are of a mature age with unmet care needs; a quarter of them are poor parents of eligible children, making the latter hard to reach.
Almost two thirds of individuals in the coverage gap are in a family with a worker and almost half of them actually work. In turn, half of those who work are in small businesses or service industries that do not give coverage. If those “renegade” states would expand coverage, they would all qualify.A study from the Department of Health and Human Services showed that, in the states that have expanded Medicaid coverage, the insurance in the marketplace for middle income citizens cost less than in states that did not.
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