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) – $30,304 for per year for a family of three in 2021. 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 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 November 2021, 12 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 proposals to address the coverage crater have been part of congressional Democrats’ Build Back Better plan that is being negotiated in the fall of 2021