Under new healthcare guidelines, roughly 48 million Americans without health insurance will be shopping for insurance in state and federal exchanges next year. But as many as 6.4 million people in certain states will still fall through coverage cracks.  

The "coverage gap" is an unintended consequence of the Patient Protection and Affordable Care Act, better known as Obamacare. The law calls for an expansion of benefits under Medicaid, the federal healthcare program for the poor. But after 26 states sued the federal government, the U.S. Supreme Court deemed the requirement optional.

Under the Obamacare guidelines, 7.6 million adults would have been newly eligible for Medicaid. In states that opt out, as many as 6.4 million of them will now be left standing alone.

An assessment by the nonprofit group the Urban Institute found that nearly two-thirds of those who would qualify under the new Medicaid expansion live in states that don’t want to participate in the expanded program. Texas, Florida, and Georgia alone contain half of the 6.4 million uninsured.

“I don’t see there being lots of options. They’re probably having a hard time meeting their basic needs, let alone money to spare to meet their healthcare needs,” Genevieve Kenney, co-director of the Urban Institute’s Health Policy Center, told Healthline.

Medicaid and the Working Poor

About a quarter of the U.S. population are considered “working poor." Those with jobs that don’t provide health insurance and who fall at or below 138 percent of the federal poverty line (FPL) are the most likely to miss out.

Obamacare guidelines allow for a person under the age of 65 who makes less than 138 percent of the FPL to receive Medicaid benefits, instead of buying private insurance. That translates to $15,857 for a single person without dependents or $32,500 for a family of four.

Beginning Jan. 1, in the states that chose to expand Medicaid, people making up to 133 percent of the FPL—about $29,700 for a family of four—will be able to receive Medicaid benefits. Those earning between 100 percent and 138 percent may be eligible for insurance exchange subsidies. 

Those over the age of 65 will be automatically covered by Medicare and won’t need to do anything different under the new exchanges.

But 28 percent of Americans earn less than 138 percent of the FPL, according to data from the Kaiser Family Foundation. Without state expansion of Medicaid, many poor patients will remain in the hands of community centers and other health organizations that are historically strapped for resources.

“When I look at what’s happened in the last ten years, the uninsured lost ground when it comes to their access to care,” Kenney said. “It brings front and center the reality that without more funding, the direct services to the uninsured fall short of what the need may be. That said, I don’t think the capacity is there to address their health needs.”

States Opting Out of Medicaid Expansion

Twenty-two states—Alabama, Alaska, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Texas, Utah, Virginia, Wisconsin, and Wyoming—have opted out of Medicaid expansion. This has left some of their residents in danger of falling into the coverage gap and going without care.

Among those states opting out, on average, nearly 20 percent of residents live below the FPL, in line with the national average. These states have an average of 6.4 percent unemployment, according to an assessment by Healthline News.

Some of the states opting out of Medicaid expansion also have rates of unemployment on the country’s higher end—up to 8.9 percent in North Carolina. This means large sections of their populations aren’t getting health insurance coverage from employers, which is how the majority of Americans receive their health benefits.

Four states—New Hampshire, Ohio, Pennsylvania, and Tennessee—are still debating whether or not to opt into the Medicaid expansion that takes effect Jan. 1.

Who in the Gap Qualifies for an Exemption?

The Internal Revenue Service does allow for exemptions: if insurance premiums would cost more than eight percent of your annual income, you can be exempted from the law's requirement that you carry health insurance. For an individual on the poverty line, the insurance costs would have to exceed $1,058 a year.

Those who choose not to carry coverage face a fine of $95 for an individual, $285 for a family, or one percent of household income, whichever is higher. By 2016, each adult could pay a fine of nearly $700. If you’re insured for less than three months of the year, you won’t have to pay the penalty.

The penalty—as well as the exemption—is handled when a person files his or her federal income tax return. Those who don’t make enough to file a federal income tax return are automatically exempt from the healthcare mandate.

Those who would qualify for Medicaid under the Obamacare expansion but can’t get services because their states have not opted in are not subject to the fine.

Here’s an important note: those who can’t pay or choose not to pay the fine cannot be subjected to criminal prosecution or penalty, according to Section 1501(g)(2) of the Affordable Care Act.

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