Medicaid expansion is the Affordable Care Act’s change to broaden Medicaid program eligibility and increase the number of people who qualify for the program. A major component of this expanded eligibility for state Medicaid programs was eligibility for a new category of people—able-bodied, working-age, and generally childless adults. The ACA created a much higher FMAP for this category—equal to 100 percent from 2014-2016, gradually declining until it reached 90 percent in 2020, where it is scheduled to remain. This FMAP policy incentivized states to expand Medicaid because most of the budgetary costs for the population of expanded enrollees were paid by the federal government, not the states. In the 2012 Supreme Court case, NFIB v Sebelius, the U.S. Supreme Court made Medicaid expansion optional for states. At the state of the expansion in 2014, about half of the states adopted the expansion. By January 1, 2024, 40 states plus the District of Columbia have expanded.
Both program enrollment and spending associated with the expansion have significantly exceeded estimates. Some of the clearest takeaways from expansion states: emergency department use for non-emergent services soared, wait times for traditional program enrollees increased, and overall population health outcomes did not improve.
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