Keep Factually independent
Whether you agree or disagree with our analysis, these conversations matter for democracy. We don't take money from political groups - even a $5 donation helps us keep it that way.
What happens in states that did not expand Medicaid under ACA?
Executive Summary
States that declined Medicaid expansion under the Affordable Care Act left a measurable “coverage gap” that has kept millions of low‑income adults uninsured, forgone large federal payments, and increased uncompensated care burdens on hospitals; political decisions, not health‑outcome uncertainty, largely explain the divergence. Recent analyses quantify the uninsured gap (roughly 1.4–3.6 million depending on measurement) and show consistent fiscal, access, and health‑service consequences in non‑expansion states [1] [2] [3].
1. Why the Coverage Gap Persists — Politics, Eligibility Rules, and Numbers That Don’t Match Expectations
States that did not expand Medicaid created a structural eligibility void: adults with incomes above their state’s narrow Medicaid eligibility but below the federal threshold for marketplace subsidies remain ineligible for coverage, producing what researchers call the coverage gap. Estimates vary: the Kaiser Family Foundation and related work put the number of people affected at about 1.4 million currently in the gap, while broader calculations count as many as 1.9–3.6 million residents lacking coverage gains because of non‑expansion [1] [4] [2]. The divergence in totals reflects different cutoff definitions, year ranges, and whether analysts count people who would enroll; all agree that the gap concentrates in Southern states and disproportionately affects working adults without dependent children and communities of color. Political alignment tracks tightly with non‑expansion: Republican governors and legislatures predominate among holdout states, indicating policy choice rather than incidental administrative delay drives the gap [2].
2. The Money Left on the Table — Federal Financing and State Fiscal Tradeoffs
States that opt out forfeit large federal payments: the ACA originally offered roughly 93–100% federal matching for newly eligible adults, and later statutory rules settled around a permanent 90% match, meaning non‑expansion states have declined substantial federal dollars. Analyses estimate tens of billions in forgone federal payments for early non‑expansion cohorts and larger cumulative sums when projected nationally [2] [3]. Independent fiscal reviews find expansion generally brings net economic activity and reduced uncompensated care that can offset some state costs, with some studies concluding states did not see major net increases in state spending after expansion. Recent legislative changes affecting Medicaid financing and provider taxes could alter the calculus for holdout states, but as of the latest literature the net fiscal case favored expansion in many analyses [5] [3].
3. Real‑World Health and Access Consequences — What Studies Show About Care and Outcomes
Empirical studies comparing expansion and non‑expansion states document consistent patterns: Medicaid expansion increases insurance coverage, primary‑care utilization, preventive services, mental‑health and substance‑use treatment access, and chronic‑disease diagnosis; non‑expansion states show higher uninsured rates, more skipped medications, and poorer self‑reported access among low‑income adults [6] [3]. The Oregon Health Insurance Experiment is sometimes invoked to question short‑term physical‑health gains; that randomized study found limited immediate physical‑health improvements but did show reductions in financial strain and improved access — outcomes echoed by later expansion studies which found longer‑term benefits beyond the Oregon timeframe. Overall the weight of observational and quasi‑experimental evidence supports improved access and socioeconomic wellbeing after expansion [7] [6].
4. Hospitals, Rural Health, and Community Strain — Who Bears the Costs Locally
Non‑expansion states continued to experience higher uncompensated care costs, straining hospitals—especially rural and safety‑net providers—because fewer newly insured patients translated into less reduction in charity‑care losses compared with expansion states. Multiple reviews show hospitals in expansion states saw declines in uncompensated care and improved financial metrics; in non‑expansion areas, hospitals faced persistent budget pressures, closures, or service cutbacks that reduced local access [3]. These local fiscal harms feed back into public health: reduced hospital capacity and financial fragility undermine emergency and specialty care availability in communities already underserved, reinforcing the uneven geographic distribution of health access tied to state expansion decisions.
5. Choices Ahead — Coverage Potential, Political Barriers, and Policy Levers
Analysts converge that if remaining non‑expansion states adopted the ACA expansion, millions more could gain coverage (estimates ranging from roughly 2.7 million to 4 million additional eligibles, depending on assumptions), with likely gains in insurance rates, economic activity, and reductions in uncompensated care [8] [1]. Yet political barriers and recent federal policy shifts—such as restrictions on Medicaid financing tools in some proposals—shape state calculations and can blunt the incentive structure [5]. The empirical record through 2025 shows the core tradeoff plainly: states choose between accepting large federal subsidies to cover low‑income adults and maintaining existing eligibility rules; that choice, not ambiguous evidence about benefits, explains why the coverage gap persists and why health and fiscal impacts differ across states [2] [3].