Rural America, Medicaid Expansion, and the Coverage Gap

Medicaid Expansion as a Rural Issue, the most recent contribution to our rural health care series of reports, examines the consequences rural states’ decisions on the Affordable Care Act’s expansion of Medicaid.

Medicaid is the joint federal-state program that provides health care coverage for low-income people, people with disabilities, children, and the elderly. Medicaid is at the center of the Affordable Care Act’s primary mission to provide near universal health insurance coverage.

The law extends Medicaid eligibility to nearly everyone under age 65 up to 138 percent of the federal poverty level ($15,856 for an individual and $32,499 for a family of four in 2013). The US Supreme Court ruling finding the Affordable Care Act constitutional also ruled that each state had the option to expand their Medicaid program.

It is estimated that nationally from 5 million to 9 million rural residents would be newly covered by Medicaid.

We examined Medicaid expansion decisions of states and whether Medicaid expansion varied by rural vs. urban population. We found:

  1. Rural states were less likely to expand Medicaid. States with the highest percentage of rural and small city population (“rural” states) were less likely to expand Medicaid.
  2. Urban states were more likely to expand Medicaid. States with the lowest percentage of rural and small city population (“urban” states) were more likely to expand Medicaid.

The two charts outline these findings for the 10 states with the largest rural population and the 10 states with the smallest rural population.

We also found that state decisions not to expand Medicaid create a “coverage gap.” People who earn too much to qualify for Medicaid but not enough to qualify for health insurance marketplace premium tax credits end up in the gap. We found nearly 1.8 million rural residents fall into the “coverage gap” in the 24 non-expansion states for which data is available, about 4 percent of the total rural population in those states.

The number of rural residents in the “coverage gap” is similar (percentagewise) to the number of people nationally who discovered they had non-Affordable Care Act compliant health insurance policies in the individual insurance market (estimated at 5 percent nationally), for which the President, Congress, commentators, and the media devoted significant attention and effort to address. No such effort is being expended for those in “coverage gap.”

The consequences of the state decisions not to expand Medicaid create a significant rural health care urgency. Driving people into the “coverage gap” leaves them without health insurance coverage; places increased financial stress on those in the gap and their families; affects the health of those in the gap; stretches the rural health care provider network, possibly to the breaking point, in non-expansion states; and possibly leaves rural communities without critical pieces of their health care foundation.

Medicaid Expansion as a Rural Issue can be found here.