Medicaid Eligibility Expansion

About 74 million people are enrolled in Medicaid (68 million in Medicaid and 6 million in CHIP), or one in five Americans. The program is funded by state and federal matching funds (Centers for Medicare & Medicaid Services 2018). The federal government and each state have different federal matching formulas, which vary between 50 and 74 percent of the state’s cost.

The ACA expanded Medicaid eligibility from 100 percent of the FPL up to 138 percent of the FPL (which translates to $16,643 for an individual and $33,948 for a family of four, as of 2017). For the first time, these eligibility standards include childless adults.

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The ACA committed the federal government to pay the entire Medicaid cost (100 percent) for each state’s expansion population (i.e., from 100 to 138 percent of the FPL) for the first three years; the percentage was decreased to 95 percent in 2017 and then to 90 percent in subsequent years. Given that almost all of the expense is paid by the federal government, an expansion state has little incentive to monitor how well federal dollars are spent.5

When the US Supreme Court overturned the ACA requirement that all states expand Medicaid eligibility, only 30 states and the District of Columbia chose to expand Medicaid eligibility. By 2017, about 13 million new adults had enrolled in Medicaid. A recent study, however, estimates that only about one-third of the new enrollees became eligible as a result of Medicaid expansion.

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