Coverage crater

The ‘coverage crater’ refers to the gap in eligibility for health insurance for indivdiuals in states that have chosen not to expand Medicaid who earn too much for traditional Medicaid but not enough to qualify for subsidies on the online health insurance marketplaces.

When the Affordable Care Act was originally drafted, it was with the expectation that all states would expand Medicaid eligibility to 138 percent of the federal poverty level (FPL) – $34,307 for a family of three in 2023. Meanwhile, people between 138 and 400 percent FPL ($99,440 for a family of three in 2023) would have access to subsidies for purchasing health insurance on the online marketplaces, thus providing seamless coverage. However, in 2012, the Supreme Court ruled that states had a choice in whether or not to expand eligibility and Oklahoma initially opted not to expand Medicaid.

Oklahoma voters approved Medicaid expansion in June 2020 and it took effect July 1, 2021. As of August 2023, 10 states have still chosen not to expand eligibility, leaving people who would have been covered by Medicaid expansion stuck in the ‘coverage crater’ without access to health insurance.  Various approaches to addressing the coverage crater were part of congressional Democrats’ Build Back Better plan that was proposed in 2021 but failed to pass Congress.