What programs do nonexpansion states use instead of Medicaid expansion?

1. States’ toolbox: marketplaces, subsidies, and targeted state programs

Many nonexpansion states lean on the ACA marketplaces and premium tax credits to provide coverage to low-income adults above 100% of the federal poverty level, while using state Medicaid rules and smaller targeted programs for others. Commonwealth Fund’s review of alternatives lays out how policymakers propose expanding marketplace premium tax credits downward (to people below 100% of FPL) or otherwise tweaking subsidies as a marketplace-focused substitute for expansion ^[1]. State-level choices vary: some use eligibility tweaks, enrollment caps, or separate programs to cover subsets of low‑income adults, producing a patchwork rather than a single statewide solution ^[4].

2. “Fill the gap” options: what analysts modeled and what they found

Researchers modeled three marketplace‑based alternatives to expansion and found they can reduce uninsured counts but do not perfectly replicate Medicaid’s effects. Commonwealth Fund’s analysis shows that extending subsidies to people below 100% of poverty and broadening premium support across incomes would cover more people — their Option 2 would cover about 4.6 million more individuals in nonexpansion states compared with pre‑ARPA subsidies — and reduce the uninsured by millions, but it also shifts federal‑state cost structures and has tradeoffs compared with traditional Medicaid expansion ^[1].

3. Federal proposals and “Medicaid‑like” coverage: a standing alternative

Federal proposals have repeatedly surfaced to provide a federally financed “Medicaid‑like” plan for residents of nonexpansion states. The Urban Institute and reporting in Becker’s document the Biden Administration’s proposals and budget items that would create such coverage for low‑income adults in nonexpansion states, but the reports underscore that proposal details remain incomplete and that the president’s budgets have not specified full program design ^{[2] [3]}.

4. Cost, incentives, and political dynamics

Financial incentives matter. Commonwealth Fund notes that recent federal incentives, such as the ARPA two‑year FMAP boost for states that newly expand, change the fiscal calculus for states weighing expansion versus alternatives ^[1]. Conversely, other federal actions — cited by Georgetown’s analysis of H.R. 1 — could alter provider financing and provider tax rules in ways that shape state decisions about expansion, leaving fiscal impacts asymmetric across states ^[5]. These federal levers create political incentives that influence whether states pursue full expansion or marketplace alternatives.

5. Coverage and health outcomes: evidence favors expansion

Comparative health research shows Medicaid expansion delivers measurable health benefits. A cohort study cited here found expansion slowed rates of health decline among low‑income adults in Southern states compared with nonexpansion counterparts, indicating outcomes that marketplace subsidies may not reproduce in the short term ^[6]. Analysts estimate millions would gain coverage if remaining nonexpansion states expanded; Urban Institute modeling projects roughly 2.3 million additional people would be covered if certain nonexpansion states expanded in modeled scenarios ^{[2] [7]}.

6. What remains unclear or contested in reporting

Available sources do not provide a definitive, uniform inventory of every state’s substitute programs nor full fiscal details for federal “Medicaid‑like” proposals; Commonwealth Fund and Urban Institute offer modeled alternatives but acknowledge assumptions and limits to their cost projections ^{[1] [2]}. Sources signal contested tradeoffs — coverage breadth, cost allocation between federal and state governments, and effects on providers — but do not settle which approach is superior in all contexts ^{[1] [5]}.

7. Bottom line for policymakers and the public

States without expansion currently use a mixture of expanded marketplace subsidies, targeted state programs, and reliance on safety‑net providers. Analysts and federal officials have proposed marketplace expansions or federally run “Medicaid‑like” plans as feasible substitutes, but modeling shows these options leave different numbers covered, shift costs, and may not replicate Medicaid’s documented health impacts ^{[1] [2] [6]}. The debate is as much fiscal and political as it is clinical: federal incentives, provider financing rules, and state policy priorities determine whether a state chooses marketplace fixes or full Medicaid expansion ^{[1] [5]}.