State expansion refers to a state’s decision to broaden its Medicaid program under the Affordable Care Act (ACA), covering adults with household incomes up to 138% of the federal poverty level. Before the ACA, most states only offered Medicaid to specific groups like pregnant women, children, and people with disabilities. Expansion opened eligibility to all adults aged 18 to 65 based on income alone, regardless of family status or health condition.
As of 2025, 41 states including Washington, D.C. have adopted Medicaid expansion. Ten states have not: Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming.
How Expansion Changed Medicaid Eligibility
Before the ACA, a low-income adult without children or a disability often couldn’t qualify for Medicaid no matter how little they earned. Each state set its own rules, and many capped eligibility well below the poverty line. The ACA was designed to create a national floor: anyone earning up to 133% of the federal poverty level would qualify. Because of the way income is calculated (a standard 5% income disregard), the effective threshold is 138% of the federal poverty level.
For a single adult in 2024, that translates to roughly $20,800 per year. If you live in an expansion state and your income falls below that line, you’re eligible for full Medicaid benefits. You don’t need to have children, a disability, or any other qualifying condition.
Why Expansion Is Optional
The ACA originally required all states to expand Medicaid. If a state refused, the federal government could withhold its entire Medicaid funding, not just the new expansion dollars. In 2012, the Supreme Court struck down that enforcement mechanism in NFIB v. Sebelius, ruling it was unconstitutionally coercive. States couldn’t meaningfully consent to a new program when the penalty for refusal was losing all existing Medicaid funding.
The Court’s remedy was straightforward: states that decline expansion only lose the federal dollars tied to expansion itself. Their existing Medicaid funding stays intact. This effectively made expansion a voluntary choice for each state, and that’s where things have stood ever since.
How the Federal Government Pays for It
Expansion comes with an unusually generous funding deal. For traditional Medicaid, the federal government covers between 50% and 77% of costs depending on the state. For the expansion population, the federal share started at 100% when coverage began in 2014 and gradually stepped down to 90% in 2020, where it remains indefinitely.
That means for every dollar a state spends covering a newly eligible adult through expansion, the federal government picks up 90 cents. The state pays the remaining 10 cents. This is significantly more favorable than the standard Medicaid match, which is why analyses of expansion’s fiscal impact on state budgets often find modest net costs or, in some cases, net savings once reduced spending in other areas is factored in.
The Coverage Gap in Non-Expansion States
In states that haven’t expanded, a significant group of people falls into what’s known as the coverage gap. These are adults who earn too much to qualify for their state’s traditional Medicaid program but too little to qualify for subsidized insurance on the ACA marketplace. Marketplace subsidies kick in at 100% of the federal poverty level, so someone earning $8,000 or $10,000 a year in a non-expansion state may have no affordable coverage option at all.
Roughly 2.4 million people fall into this gap nationally. They are disproportionately concentrated in southern states with large uninsured populations, particularly Texas and Florida.
Health Outcomes in Expansion States
A large study published in The Lancet Public Health found that states adopting expansion saw about 12 fewer deaths per 100,000 adults per year compared to non-expansion states. The reductions were most pronounced for cardiovascular deaths (5 fewer per 100,000) and respiratory deaths (1.6 fewer per 100,000). These are conditions where early detection and ongoing management, both of which depend on having insurance, make a measurable difference.
The benefits weren’t uniform across all expansion states. Delaware saw the largest reduction at roughly 64 fewer deaths per 100,000, while some states saw little change. Researchers found that states with higher proportions of women and Black residents experienced greater reductions in mortality, likely because these populations had the largest gaps in coverage before expansion.
Separately, the study found that for every percentage point decrease in a state’s uninsured rate, there were about 1.6 fewer deaths per 100,000 adults, a relationship that held regardless of whether the state had formally expanded Medicaid.
Impact on Hospitals and Costs
When uninsured people visit emergency rooms or receive care they can’t pay for, hospitals absorb those costs as “uncompensated care.” Expansion significantly reduces this burden. In fiscal year 2020, hospitals in expansion states spent 2.7% of their operating expenses on uncompensated care, compared to 7.3% in non-expansion states. That gap translates to millions of dollars per hospital system and affects everything from staffing to whether rural hospitals can stay open.
Rural hospitals in non-expansion states have been particularly vulnerable to closure, since they serve populations with higher uninsured rates and fewer alternative revenue sources.
Work Requirements and State Variations
Some states have sought to add conditions to expansion, most notably work requirements that would mandate a minimum number of hours of employment, job searching, or volunteering as a condition of keeping Medicaid coverage. Between 2018 and 2020, several states received federal approval to impose these requirements through special waivers.
In 2024, the Department of Health and Human Services issued an advisory opinion concluding that the Secretary lacks authority to approve work requirements for Medicaid, on the grounds that restricting access to coverage for otherwise eligible people conflicts with Medicaid’s core purpose of furnishing medical assistance. Georgia remains the only state with an active work requirement waiver, though its implementation has been limited by court challenges. Under Georgia’s “Pathways to Coverage” program, enrollment has been far lower than projected, illustrating the practical barriers work requirements create for the very population expansion is designed to reach.
A few states use slightly different income limits or have negotiated other modifications through federal waivers, such as requiring small premium payments or using expansion funds to subsidize private insurance rather than traditional Medicaid. These variations mean the experience of being enrolled in “expanded Medicaid” can look somewhat different depending on where you live.