Millions Could Enter Coverage Gap Without Medicaid Expansion

Nearly 11.5 million uninsured U.S. residents with incomes below the federal poverty line could fall into a new coverage gap if every state decided to opt out of the federal health reform law's Medicaid expansion, the AP/Sacramento Bee reports.

Analysts already are referring to the coverage gap as the new "doughnut hole" in reference to a coverage gap in the Medicare Part D prescription drug benefit (Alonso-Zaldivar, AP/Sacramento Bee, 7/18).

In its ruling on the Affordable Care Act last month, the U.S. Supreme Court said that states could opt out of the Medicaid expansion without any effect on current funding (California Healthline, 6/28).

Details of New 'Doughnut Hole'

According to the AP/Bee, individuals who would fall in the new coverage gap would not be eligible for Medicaid in their states under current requirements. They also would not qualify for subsidized private coverage in the state health insurance exchanges that will be launched in 2014 under the overhaul.

However, children and their mothers in low-income families would continue to receive coverage under Medicaid.

In 2014, millions of U.S. residents whose earnings are over the poverty line would be eligible for subsidized coverage through the exchanges. But "then this group [under the poverty line] has nothing," said Matt Salo, executive director of the National Association of Medicaid Directors.

Implications Following November Election

If presumptive Republican presidential nominee Mitt Romney wins the election in November and proceeds to dismantle the reform law, the states that opt out of the expansion likely will not face the new coverage problem, according to the AP/Bee.