*** Nebraska plans to expand coverage as of October 2020, with enrollments starting in August 2020.***

When the Affordable Care Act was enacted in 2010, Medicaid expansion was a cornerstone of lawmakers’ efforts to expand realistic access to healthcare to as many people as possible. The idea was that everyone with household incomes up to 133 percent of poverty (138 percent with the 5 percent income disregard) would be able to enroll in Medicaid.



Since 2010, the number of states that have accepted ACA’s Medicaid expansion has steadily grown – from just a handful by 2012 to 35 states and DC as of early 2020. Nebraska will join that list as of October 2020, after voters approved Medicaid expansion in a 2018 ballot initiative.

At the same time, there are a host of other Medicaid-related developments in the works across the country – both in expansion and non-expansion states – that promise to dramatically affect eligibility for and access to Medicaid benefits. Some states are moving toward changes that would put increased limits on Medicaid eligibility – such as work requirements and lifetime caps – while other states are considering legislation that would give currently ineligible residents a chance to buy-in.

Suffice it to say, there’s plenty of activity to monitor at the state level.

States to watch for Medicaid changes

Several states are considering various changes to their Medicaid systems in 2020. In some cases, lawmakers are considering expansion or seeking a federal waiver to change the way Medicaid eligibility is handled. In other states, lawmakers and state officials are working to address new voter-approved ballot initiatives that call for Medicaid expansion:



Medicaid expansion with a ballot initiative

In Maine, Utah, and Idaho, Medicaid expansion has come about as a result of ballot initiatives approved by voters. And Nebraska will join them as of October 2020 — Nebraska voters passed a Medicaid expansion ballot initiative in the 2018 election, but implementation has been slow (enrollment begins in August 2020)

For 2020 Medicaid expansion ballot initiatives, Oklahoma and Missouri are states to watch. In Oklahoma, sufficient signatures were gathered to get the measure on the ballot, and the governor will determine whether it appears on the primary ballot in June, or on the general election ballot in November. In Missouri, Medicaid expansion advocates are still gathering signatures in order to get the measure on the ballot.

Legislation to expand Medicaid

Lawmakers in the states that haven’t expanded Medicaid have continued to introduce legislation each year in an effort to expand coverage. In 2018, Virginia lawmakers passed a budget that includes Medicaid expansion, with coverage that took effect in January 2019. A year later, more than 372,000 people had gained coverage in Virginia under Medicaid expansion.

In the 2020 legislative session, a bipartisan Medicaid expansion bill is under consideration in Kansas, making it a state to watch this year.

Although it’s a federal waiver proposal rather than a legislative approach, Georgia has proposed a partial expansion of Medicaid that would take effect in 2021. The proposal is under review by CMS as of early 2020 (a similar partial expansion — with a request for full Medicaid expansion funding — was proposed by Utah in 2019 and rejected by the federal government).



Medicaid work requirements

Requiring Medicaid enrollees to be working (or volunteering, in school, in job training, etc.) for at least a certain number of hours per week is an idea that tends to be popular with Republican lawmakers. Most people who receive Medicaid benefits are either already working or would be exempt from work requirements (due to being disabled, taking care of a minor child, pregnant, etc.), but the myth of the “welfare queen” (or king) persists, and Medicaid work requirements are seen by some as a solution to a perceived problem.

The federal Centers for Medicare and Medicaid Services (CMS) has to approve a Medicaid work requirement before a state can implement it. The Obama administration did not allow any work requirements for Medicaid, but the Trump administration has been much more open to the idea.

As of early 2020, twelve states had received federal approval for work requirements, and several others have pending waivers or are expected to submit waivers in the near future. But work requirements were only in effect in Utah and Michigan as of January 2020, and both have since been suspended (Utah’s as a result of the COVID-19 pandemic, and Michigan’s as a result of a court order).

Wisconsin has been working towards implementation a work requirement in early 2020; if it’s put into effect, Wisconsin will be the first state to have a work requirement without expanding Medicaid. South Carolina has been working towards implementation of a Medicaid work requirement that was approved by the federal government in late 2019, and also has not expanded Medicaid. In the rest of the states where Medicaid work requirements have been approved, they have either been overturned by a judge, paused by state administrators, or are not yet scheduled to take effect.

But amid the COVID-19 pandemic, the US has enacted the Families First Coronavirus Response Act. Among many other things, the law addresses a wide range of insurance-related issues. One of them is a temporary increase in the portion of Medicaid costs that the federal government pays for each state, but that additional funding is contingent on the states not removing anyone from their Medicaid roles until the end of the COVID-19 emergency period, unless the person moves out of the state or voluntarily requests that their Medicaid coverage be terminated (the Georgetown University Health Policy Institute has a good summary of the Medicaid provisions in the law). So for the time being, Medicaid work-requirements are essentially a no-go, as they would cause a non-compliant enrollee’s Medicaid coverage to be involuntarily terminated. Shortly after the federal coronavirus relief law was enacted, Utah suspended its Medicaid work requirement, which was the only one in effect in the country at that point (Michigan’s had been overturned by a judge the month before).

A federal judge has overturned federally-approved Medicaid work requirements in Arkansas, Kentucky, New Hampshire, and Michigan, citing the fact that numerous people would lose coverage under the terms of the work requirements, and the government had done nothing to ameliorate that problem. The Trump administration and some of the affected states appealed the court ruling, but the issue is in legal limbo for the time being. Arkansas paused its program in 2019, New Hampshire had already delayed its program before it was overturned, and Kentucky’s new governor officially withdrew the work requirement proposal soon after taking office. Governors in Virginia and Maine have also paused or withdrawn the Medicaid work requirements in those states.

Medicaid work requirements in Arizona and Indiana have been postponed or suspended for the time being. And the bipartisan Medicaid expansion legislation under consideration in Kansas in 2020 does not include a work requirement (it has a work referral program instead, which is less costly for the state to administer and does not result in people losing their coverage).

The following is a summary of what’s happened in each of the states where work requirements have been approved or are pending federal approval (keeping in mind that the Families First Coronavirus Reponse Act essentially prohibits Medicaid work requirements for now, as a condition for states to received the additional federal Medicaid funding provided by the Act).

Work requirements for states that have expanded Medicaid:

Work requirements that were in effect in early 2020 but have since been suspended:

Michigan (approved, effective January 2020, but overturned by a judge in March 2020) — 80 hours per month (Michigan legislation initially called for 29 hours per week of work/community engagement, but it was revised to 80 hours per month before the final bill passed). A federal judge overturned the state’s Medicaid work requirement in early March 2020, so residents are not currently required to comply with it.

Utah (approved, effective January 2020, but suspended amid the COVID-19 outbreak in April 2020) — beneficiaries are exempt from the community engagement requirement as long as they’re working at least 30 hours per week. And there are numerous other exemptions for various populations. But people who weren’t exempt had to comply with the state’s community engagement requirements. This involved creating an account on jobs.utah.gov, completing an online evaluation and workshops, and applying for at least 48 jobs within a three-month period.

Medicaid expansion states where new governors have withdrawn pending work requirements:

Expansion states where work requirements have been approved by CMS but are not yet in effect as of 2020:

Arkansas (CURRENTLY PAUSED AFTER JUDGE OVERTURNED THE WORK REQUIREMENT) approved, effective June 2018 for people age 30-49; people age 19-29 were expected to have to comply as of 2019. — 80 hours per month.

Indiana (CURRENTLY PAUSED, AWAITING OUTCOME OF LAWSUIT) approved, phased in, starting in 2019: 5 hours per week initially, increasing to 20 hours per week.

New Hampshire (CURRENTLY PAUSED AFTER JUDGE OVERTURNED THE WORK REQUIREMENT) approved, initially scheduled to take effect in April 2019, but delayed until September 2019 before being overturned by a judge — 100 hours per month.

Arizona (POSTPONED UNTIL FURTHER NOTICE) — 80 hours per month for people age 19 to 49. Had been scheduled to take effect in some areas of the state in the fall of 2020, and roll out to other parts of the state in 2021 and 2022.

Ohio (approved; Ohio plans to implement the work requirement as of January 2021, although state lawmakers are calling for a delay) — 20 hours per week.

Medicaid expansion states with pending work requirement proposals:

Idaho — submitted a work requirement proposal to CMS in September 2019. Medicaid expansion took effect in Idaho as of January 2020. If approved, the work requirement would call for Medicaid expansion enrollees to work at least 20 hours per week.

Montana — Medicaid expansion took effect in Montana in 2016, but the state is now seeking federal approval to add a work requirement. The waiver proposal was submitted to CMS in August 2019 and is pending approval. The state had initially planned to implement the requirement as of January 2020, but that’s been delayed (the federal review process can take many months). If approved, the work requirement calls for participants to work at least 80 hours per month.

Nebraska — Medicaid expansion takes effect in October 2020; Medicaid community engagement proposal is pending federal approval, but the state has noted that it won’t be approved in time for the expansion start date. Nebraska’s work requirement is different from most of the other states though: It’s intended to be a way for beneficiaries to obtain additional benefits, as opposed to a requirement for basic eligibility.

Lawmakers in Louisiana considered several work requirement bills in 2018, but none were enacted. Lawmakers in Pennsylvania passed Medicaid work requirement legislation in 2017 and again in 2018, but Governor Tom Wolf vetoed both bills.

Lawmakers in Alaska considered Medicaid work requirement legislation in 2019, but the measure did not advance to a vote.

Work requirements for states that have not expanded Medicaid:

Several states that have not expanded Medicaid are seeking federal permission to impose Medicaid work requirements, despite the fact that their Medicaid populations are comprised almost entirely of those who are disabled, elderly, or pregnant, as well as children.

The Trump Administration has begun granting work requirements in some of these states, although CMS Administrator, Seema Verma clarified in May 2018 that these states will have to clearly demonstrate how they plan to avoid situations in which people lose access to Medicaid as a result of the work requirement, and yet also do not have access to premium subsidies in the exchange.

Non-expansion states with approved Medicaid work requirements:

Thus far, two non-expansion states have been granted federal approval to implement Medicaid work requirements for their existing Medicaid populations:

South Carolina (approved, but not yet implemented as of April 2020) — 80 hours per week

Wisconsin (approved, was slated to take effect in November 2019 but has been delayed until sometime in 2020) — 80 hours per month. A week after CMS approved Wisconsin’s waiver, voters elected Democrat Tony Evers to replace GOP Governor Scott Walker. Evers is opposed to the work requirement, but lawmakers in Wisconsin have refused to repeal it. Note that although Wisconsin has not expanded Medicaid as called for in the ACA, there is no coverage gap in Wisconsin as people below the poverty level are eligible for Medicaid.

Non-expansion states seeking federal permission to impose a Medicaid work requirement:

Kansas had also requested CMS approval for a work requirement of 20 or 30 hours per week, depending on circumstances. But that provision was later removed from the state’s Medicaid renewal proposal, and the waiver approval that was granted by CMS in December 2018 did not include a work requirement. And the bipartisan Medicaid expansion legislation that Kansas lawmakers are considering in 2020 has a work referral program instead of a work requirement.

Lawmakers in Missouri also considered legislation that called for an 80 hour per month work requirement, but the bill did not pass in the 2018 session.



Other Medicaid proposals to watch

Several states have sought CMS approval to implement lifetime caps for Medicaid coverage, including Arizona, Kansas, Maine, Utah, and Wisconsin. But thus far, CMS has not approved this provision for any states. Arizona’s work requirement approval noted that CMS was rejecting the state’s proposal to cap eligibility at five years for people who were subject to, but not in compliance with, the work requirement.

The Trump administration also rejected Arkansas’ proposal to cap Medicaid eligibility at 100 percent of the poverty level, instead of 138 percent. The agency also rejected a similar proposal from Utah in 2019. Massachusetts has a similar request pending CMS approval.

And no states have received approval for an asset test for Medicaid. Maine proposed an asset test as part of an 1115 waiver proposal, but that portion of the waiver was not approved.

Several states have received approval, however, to impose premiums on certain Medicaid populations, restrict retroactive eligibility, and require more eligibility redeterminations.

“Private option” Medicaid

Arkansas pioneered the “private option” approach to the state Medicaid expansion, under which the state uses Medicaid funds to purchase private health insurance in the individual market for Medicaid-eligible enrollees. Some other states followed suit to varying degrees over the coming years, but have since transitioned back to a more traditional approach (Medicaid fee-for-service or Medicaid managed care). Arkansas is the only state that still uses the private option approach.

New Hampshire enacted legislation in 2018 that directed the state to abandon the private approach to Medicaid expansion that was being used in the state at the time (buying policies in the exchange for people eligible for expanded Medicaid) and switch to a Medicaid managed care program instead. The state submitted a waiver amendment proposal to CMS in August 2018, and the transition took effect in 2019.

Iowa’s Medicaid expansion program initially used Medicaid funds to buy marketplace coverage for people with income above the poverty level, but the state switched to regular Medicaid managed care as of 2016.



Medicaid buy-in

Some states have also considered the possibility of seeking approval for a Medicaid buy-in program, under which people who aren’t eligible for Medicaid would be allowed to purchase Medicaid coverage. This is an excellent overview of the status of Medicaid buy-in legislation in various states.

Nevada lawmakers passed legislation to allow Medicaid buy-in during the 2017 legislative session, but the governor vetoed it. Lawmakers in Colorado, Maryland, and New Mexico considered legislation in 2018 that would direct the state to conduct a study on the feasibility and cost of a Medicaid buy-in program (ie, allowing people who aren’t eligible for Medicaid to purchase Medicaid coverage instead of private market coverage). Colorado lawmakers ultimately did not pass the bill, and neither did Maryland lawmakers. But New Mexico enacted legislation in early 2018 calling for a study on the costs and ramifications of a Medicaid buy-in program. Lawmakers in New Mexico considered SB405 in 2019 (which would have created a Medicaid buy-in program), but it did not pass.

Minnesota lawmakers considered, but did not pass, a bill in 2017 that would have allowed people to buy into MinnesotaCare, the state’s Basic Health Program (similar to Medicaid, but for people with slightly higher income). This issue was revisited in 2018 and DFLers still supported it in 2019, but it hasn’t gone anywhere yet.

Thus far, Medicaid buy-in has not gained much traction. But Democrats have been warming to the idea of a public option or single payer system (public option programs are being created in Colorado and Washington as of 2020), and Medicaid buy-in would certainly be a step in that direction.



History of Medicaid expansion

As noted at the start of this summary, Medicaid was a cornerstone of ACA lawmakers’ efforts to expand access to healthcare. The idea was that everyone with household incomes up to 133 percent of the federal poverty level (FPL) would be able to enroll in Medicaid.

People above that threshold – but whose incomes didn’t exceed 400 percent of FPL – would be eligible for premium tax credits in the exchanges to make their coverage affordable.

The idea was that people with income above 400 percent of the poverty level would be able to afford coverage without subsidies, but that has not proven to the case. Many Democratic lawmakers have called for the elimination of the income cap for subsidy eligibility, replacing it with the concept that nobody should pay more than a set percentage — generally in the range of 10 percent — of their income for a benchmark health plan, with subsidies as necessary to make this happen. (Regardless of income, people who get their insurance from an employer receive subsidies in the form of the employer’s contribution to their premiums — which are typically very substantial — and their premiums are pre-tax).

Because Medicaid expansion was expected to be a given in every state, the law was written so that premium subsidies in the exchange are not available to people with incomes below the poverty level. They were supposed to have access to Medicaid instead.



14 states still say ‘No’ to Medicaid expansion (Nebraska has agreed to expand coverage, but it doesn’t take effect until October 2020)

Unfortunately for millions of uninsured Americans, in 2012 the Supreme Court ruled that states could not be penalized for opting out of Medicaid expansion. And 14 states have not yet expanded their programs. (Until late 2015, there were still 22 states that had not expanded Medicaid, but Montana began enrolling people in their newly expanded Medicaid program in November 2015, for coverage effective January 2016, Alaska‘s Medicaid expansion took effect in September 2015, Louisiana‘s Medicaid expansion took effect in July 2016, and Virginia began enrolling people in expanded Medicaid as of November 2018, for coverage effective January 2019. Maine expanded Medicaid as soon as Governor Mills took office in early 2019. Utah and Idaho both implemented full Medicaid expansion as of 2020, and Nebraska will do so as of October 2020 (Medicaid expansion in Utah and Idaho came about as a result of ballot initiatives that were approved by voters; Oklahoma and Missouri might follow suit in the 2020 election).

As a result of the failure to expand coverage in the 14 states, the Kaiser Family Foundation estimates there are 2.3 million people in the coverage gap across 13 of those states (although Wisconsin has not expanded Medicaid under the ACA, BadgerCare Medicaid is available for residents with incomes up to the poverty level, so there is no coverage gap in Wisconsin).

Being in the coverage gap means you have no realistic access to health insurance. These are people with incomes below the poverty level, so they are not eligible for subsidies in the exchange. But they are also not eligible for their state’s Medicaid program.

In many of the states that have not expanded Medicaid, low-income adults without dependent children are ineligible for Medicaid, regardless of how little they earn. For those who do have dependent children, the income limit for eligibility can be very low: In Alabama, parents with dependent children are only eligible for Medicaid if their income doesn’t exceed 13 percent of the poverty level. For a family of three, that’s only $231 per month (and yet, Alabama wants to impose a strong work requirement on those parents who are currently eligible for coverage).



More states easing into expansion

New Hampshire, Michigan, Indiana, Pennsylvania, Alaska, Montana, and Louisiana all expanded their Medicaid programs between 2014 and 2016. Expansion took effect in Virginia and Maine in 2019, and in Utah and Idaho in 2020.

The 2018 election was pivotal for Medicaid, with three states passing ballot initiatives to expand Medicaid, and Kansas, Wisconsin, and Maine electing governors who are supportive of Medicaid expansion (Maine voters had already approved Medicaid expansion in the 2017 election, but it wasn’t implemented until early 2019, when the state’s new governor took office; Kansas appears poised to be the next state to expand coverage, with bipartisan legislation under consideration in 2020 and a governor who is eager to sign it into law).

The first six states to implement Medicaid did so in 1966, although several states waited a full four years to do so. And Alaska and Arizona didn’t enact Medicaid until 1972 and 1982, respectively. Eventually, Medicaid was available in every state, but it certainly didn’t happen everywhere in the first year.

There’s big money involved in the Medicaid expansion decision for states. Under ACA rules, the federal government pays the vast majority of the cost of covering people who are newly eligible for Medicaid. Through the end of 2016, the federal government fully funded Medicaid expansion. The states started to pay a small fraction of the cost starting in 2017, eventually paying 10 percent by 2020. From there, the 90/10 split is permanent; the federal government will always pay 90 percent of the cost of covering the newly eligible population, assuming the ACA remains in place.



The cost of NOT expanding Medicaid eligibility

Because the federal government funds nearly all of the cost of Medicaid expansion, the 14 states that haven’t yet taken action to expand Medicaid have been missing out on significant federal funding — more than $305 billion between 2013 and 2022.

[Indiana, Pennsylvania, Alaska, Montana, Louisiana, Virginia, Maine, Utah, and Idaho have expanded their Medicaid programs since that report was produced in 2014, so they are no longer missing out on federal Medicaid expansion funding. Nebraska’s Medicaid expansion takes effect in late 2020 and the state will begin receiving federal Medicaid expansion funding at that point, so they’re also not included in the $305 billion total.]

Just five states – Florida, Texas, North Carolina, Georgia, and Tennessee – would have received nearly 60 percent of that funding (a total of $227.5 billion) if they had expanded Medicaid to cover their poorest residents starting in 2013. The good news is that although the federal government is no longer funding the full cost to expand Medicaid, they’ll always pay at least 90 percent of the cost, making the state Medicaid expansion a good deal for states regardless of when they implement it (in other words, for every dollar a state spends to cover its Medicaid expansion population, the federal government will kick in $9).

For residents of states that haven’t expanded Medicaid, their federal tax dollars are being used to pay for Medicaid expansion in other states, while none of the Medicaid expansion funds are coming back to their own states. From 2013 to 2022, $152 billion in federal taxes will be collected from residents in states not expanding Medicaid, and will be used to fund Medicaid expansion in other states.

The human toll of the Medicaid coverage gap

Of course, there’s more to Medicaid expansion than just money. Harold Pollack very clearly explains the human toll of the Medicaid coverage gap: Based on the 3,846,000 people who were expected to be in the coverage gap in January 2015, we can expect 4,633 of them to die in any given year because they don’t have health insurance.

[Pollack’s number is higher, because his article was written in May 2014, before New Hampshire and Pennsylvania agreed to expand coverage; Indiana and Alaska also expanded coverage in 2015, and Montana‘s enrollment in Medicaid expansion began in November 2015, for coverage effective January 2016; Louisiana‘s Medicaid expansion took effect in 2016, Virginia‘s in January 2019, Maine‘s in February 2019, and Utah‘s and Idaho‘s in January 2020. There has been a slow but steady increase in the number of states that have expanded Medicaid.]



Public support for Medicaid expansion

Public support for Medicaid expansion is relatively strong, even in Conservative-leaning states: In Wyoming (considered the most Conservative state), 56 percent of the public are in favor of Medicaid expansion. But the Republican-led legislature in Wyoming has consistently rejected Medicaid expansion, despite Republican former Governor Matt Mead’s support for expansion.

Voters in Utah, Idaho, and Nebraska — all conservative-leaning states — approved Medicaid expansion ballot initiatives in the 2018 election.

In Texas – home to more than a quarter of those in the coverage gap nationwide – a board of 15 medical professionals appointed by then-Governor Rick Perry recommended in November 2014 that the state accept federal funding to expand Medicaid, noting that the uninsured rate in Texas was “unacceptable.” But no real progress towards Medicaid expansion has been made since then, and U.S. census data indicated that 17.7 percent of Texas residents were uninsured in 2018 – the highest rate in the country

There are several other states where the legislature or the governor – or both – are generally opposed to the ACA, but where Medicaid expansion has been actively considered, either by the governor or legislature or in negotiations with the federal government. These include Kansas, North Carolina, Tennessee, and Missouri. Of these, Kansas appears likely to be the next state to expand Medicaid, but Missouri voters might get a chance to vote on expansion in the 2020 election.

Our Medicaid section provides updated state-by-state information on the current status of Medicaid expansion, along with general information about each state’s program. If you’re curious about what’s going on in your state, check it out.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.