Coverage crater

This term refers to people 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) – $29,435 for per year for a family of three in 2019. Meanwhile, people between 138 and 400 percent FPL 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.

Oklahoma voters approved Medicaid expansion in June 2020 to take effect by July 1, 2021. As of November 2020, 12 states have 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.