Medicaid Policy: What the Evidence Shows About Expansion and Access

Medicaid covers more than 90 million Americans, making it the largest source of health insurance in the United States by enrollment. It provides coverage to low-income adults, children, pregnant women, elderly individuals, and people with disabilities, and it finances roughly half of all long-term care services. Policy decisions about Medicaid's structure, eligibility criteria, benefit design, and financing have enormous consequences for health coverage, access to care, and health outcomes for the populations it serves. The Affordable Care Act of 2010 included a provision expanding Medicaid to cover all adults with incomes up to 138 percent of the federal poverty level, effectively closing the gap between children's Medicaid eligibility and subsidized marketplace coverage for adults. A 2012 Supreme Court ruling made the expansion optional for states rather than mandatory. Since then, states have adopted expansion at different rates. By 2024, 40 states and the District of Columbia had adopted expansion, while ten states had not, primarily in the South. The evidence on ACA Medicaid expansion effects is now substantial and consistently positive. Studies document that expansion states experienced significant reductions in the uninsured rate, reduced rates of catastrophic medical expenses, improved access to primary and specialty care, and reductions in financial hardship among low-income adults. Research on health outcomes shows improvements in self-reported health, reductions in mortality from treatable conditions, and better management of chronic diseases including diabetes and cardiovascular disease in expansion states compared to non-expansion states. For non-expansion states, the evidence shows that large gaps remain in coverage for low-income adults, many of whom fall into the coverage gap where their incomes are too high for non-expanded Medicaid but too low to qualify for marketplace subsidies. Research on these individuals documents higher rates of uninsured status, delayed care, and worse health outcomes compared to comparable individuals in expansion states. The states that have chosen not to expand Medicaid are disproportionately states with larger Black populations, a pattern that has contributed to documented racial health disparities. Federal financing of Medicaid operates through a matching formula in which the federal government pays a share of state Medicaid costs that varies based on state income levels. For the ACA expansion population, the federal government initially paid 100 percent and has since settled at 90 percent, making expansion financially attractive for states. Studies of expansion's fiscal effects find that expansion has generally reduced state spending on uncompensated care, hospital charity care, and other safety net costs, partially offsetting the state share of expansion costs. Managed care has become the dominant model for Medicaid delivery, with the majority of Medicaid beneficiaries now enrolled in managed care plans. Managed care organizations receive capitated payments to coordinate beneficiary care and are responsible for delivering covered services within their payment. Evidence on Medicaid managed care outcomes is mixed: some studies show improvements in care coordination and some show worse access to specialists and reduced quality on certain measures compared to fee-for-service. The quality of managed care contracts, oversight, and accountability structures varies substantially across states. Long-term care financing through Medicaid is a distinct and significant policy domain. Medicaid is the primary payer for nursing home care for people who have exhausted their personal resources, and it finances a growing share of home and community-based services for elderly and disabled individuals. The demand for long-term care is expected to grow substantially as the population ages, creating fiscal pressure on Medicaid budgets and policy debates about sustainability, benefit design, and the balance between institutional and community-based care. Work requirements for Medicaid have been a policy tool proposed repeatedly and implemented in a small number of states under 1115 waivers. Evidence from Arkansas, the state that implemented requirements most extensively before courts blocked them, shows that the primary effect was coverage loss for eligible individuals who could not navigate reporting requirements, not an increase in employment. Subsequent research has reinforced the finding that work requirements reduce coverage more than they increase employment. Dental coverage, while not required in adult Medicaid under federal law, is provided by most states in some form. The adequacy of dental coverage varies widely, with some states providing comprehensive coverage and others limiting benefits to emergency services. Evidence on the health consequences of dental disease is clear: untreated dental problems cause pain, affect nutrition, reduce employment prospects, and have documented connections to certain systemic health conditions. Strengthening Medicaid dental coverage for adults is a policy opportunity with documented health benefits. The role of Medicaid in mental health and substance use treatment has grown significantly, particularly following ACA expansion and the opioid epidemic. Medicaid is now the largest single payer for substance use treatment in the country. Expansion of Medicaid coverage of medication-assisted treatment for opioid use disorder has been a major policy initiative, and evidence documents that expansion improved access to treatment in states that adopted it. The continued development of Medicaid as a vehicle for integrated mental health and primary care represents one of the most significant policy opportunities in both domains.