A new KFF issue brief explores several potential policy options that would help close the Affordable Care Act’s “coverage gap,” including providing further new incentives for states to expand Medicaid, creating a new “public option” or extending ACA Marketplace premium subsidies to low-income people who don’t currently qualify for federal help.
At stake is affordable health coverage for 2.2 million uninsured people with incomes below the federal poverty level ($12,880 annually for an individual in 2021), who currently do not qualify for either their state’s Medicaid program or federal premium subsidies in the ACA marketplace. As of April 2021, 12 states have not adopted the ACA’s Medicaid expansion to provide coverage to adults with incomes through 138% of poverty.
President Biden proposed the public option approach during the 2020 campaign and is expected to soon release his American Families Plan proposal that could include a provision to address the coverage gap.
The KFF brief also explores the challenges and budgetary cost considerations of the potential options to expand coverage, all of which are likely to increase federal spending and could require offsets through other proposals that produce savings.
A previously released analysis of the coverage gap is also available.