Medicaid expansion from the Affordable Care Act (ACA, or "Obamacare") offers eligibility to Medicaid to those people who earn 138% of the federal poverty level (technically, only those under 133% of poverty level qualify, but 5% of income will be ignored, effectively making the new limit 138%). This means that in states that expand Medicaid, a family of four making $2,610 per month or less can get coverage from Medicaid. (In contrast, most states now limit Medicaid for adults to those who make under 50-100% of the federal poverty level.)
States, however, can opt out of “Medicaid expansion” because of a Supreme Court decision on the ACA in June 2012. So far, a little more than half the states have opted into Medicaid expansion. A handful are still actively debating whether to join in, and about 20 states are opting out of Medicaid expansion. There is no deadline for states to approve a Medicaid expansion, so states that have not opted into Medicaid expansion may continue to debate it over the next year or so.
States That Have Approved Medicaid Expansion
As of late January 2015, 29 states (many in the North East and on the West Coast) have agreed to opt into health care reform’s Medicaid expansion. In these states, the federal government will pay 100% of the states’ costs for covering these additional people for the first two years, and at least 90% of the costs after that.
Of the above states, all operate their own insurance marketplace except for Arizona, New Jersey, Ohio, and Pennsylvania. These states plan to rely on the federal Health Care Marketplace. Arkansas, Delaware, Illinois, Iowa, Michigan, New Hampshire, and West Virginia operate a state marketplace in partnership with the federal government.
Indiana has a pending waiver set up with the federal government to expand Medicaid eligibility with some changes from how other states' Medicaid expanstion works.
States That Have Not Opted Into Medicaid Expansion
About 20 states, most of them in the American South and Mid-West, have not voted to approve Medicaid expansion:
Some of these states, however, are still considering expansion or are offering proposing alternative plans. These states are Alaska, Montana, Tennesee, Utah, Virginia, and Wyoming.
What happens in states that don't allow Medicaid expansion? Many low-income adults who are under 65 and without children will go without health care. Some may qualify for a subsidy to buy inexpensive insurance through the federal Health Care Marketplace, but if they don’t, they won’t get hit with the penalty for not having insurance. (The individual mandate rules allow for those with very low income to avoid the penalty.)
Of all the states that are not opting into Medicaid expansion, only Idaho is moving forward with plans to operate its own state-based health care marketplace to offer health care plans to consumers. Folks in the other states will need to use the federal Health Care Marketplace.
Based on Kaiser Family Foundation’s “Status of State Action on the Medicaid Expansion Decision.”