In some states there is a band of income that is too high for that state's Medicaid program and too low for help with a Marketplace premium. People whose income falls in that band can end up unable to get affordable coverage from either direction. That band is what people mean by the coverage gap.
It is not a mistake anybody made, and it is not something you did wrong. It is a consequence of a policy decision each state made separately.
Why the gap exists at all
Help with Marketplace premiums begins at 100% of the federal poverty level. The Affordable Care Act originally assumed that everybody below that line would be covered by an expanded Medicaid program instead.
States were later able to decide individually whether to expand Medicaid. In states that did not expand, Medicaid continued to cover a narrower group, generally excluding many adults without children. That leaves people below the poverty line with income too low for Marketplace assistance and circumstances outside their state's Medicaid rules.
Roughly 1.4 million people nationally are in this position.
Which of our seven states have a gap
Five of the seven states we work in have a coverage gap: Florida, Texas, Tennessee, South Carolina and Alabama. None of those states expanded Medicaid.
Texas alone holds roughly 42% of everybody in the coverage gap nationally, which makes it by a wide margin the state where this matters most.
North Carolina does not have a gap. North Carolina expanded Medicaid in December 2023, so adults below a certain income are generally covered through the state program rather than the Marketplace.
Wisconsin does not have a gap either, and it reaches that result differently from every other state. Wisconsin did not expand Medicaid in the usual way, but BadgerCare covers adults below the poverty line regardless. Above that line, Marketplace plans carry the strongest assistance available. Either way there is generally a path, which is why coverage-gap language does not apply in Wisconsin at all.
What this page cannot tell you
Whether any of this applies to you depends on your household size, your exact income, your state and several other details. This page has none of that, and working it out from a website would be guessing on something far too important to guess about.
Household size in particular moves the line more than people expect. Two households reporting the same income can land on opposite sides of it depending on how many people are counted.
What is genuinely worth doing
Apply for your state's Medicaid program anyway, even in a state with a gap. The rules cover more people than most expect, particularly households with children, anybody who is pregnant, and people with a disability. Medicaid applications stay open throughout the year rather than only during enrollment season.
It is also worth having a licensed agent look at your actual situation. People are sometimes further from the line than they assumed, in either direction, and household size alone can move somebody across it. That conversation costs nothing and carries no obligation.
The gap does not mean no options
Being in the coverage gap is a genuinely difficult position, and it is worth being honest about that. It does not mean nothing exists.
Medicaid and CHIP cover more situations than people assume. Community health centers provide care on a sliding scale based on income. Hospitals operate charity care and financial assistance programs that many people who qualify never apply for. None of those replace insurance, and all of them are real.
Where to look next
Coverage rules differ substantially between our seven states, and the state pages carry the specific position for each one. If your income situation recently changed, or you recently lost Medicaid coverage, that may open a sign-up window in its own right, which is covered in losing Medicaid coverage and what to do next.
Why the situation is frequently misunderstood
The coverage gap is counterintuitive because it inverts the expectation people reasonably hold, which is that assistance increases as income decreases.
Marketplace assistance instead begins at a defined threshold and does not extend below it, because the original design assumed a different program would cover everybody underneath. Where that assumption did not hold, earning slightly more can genuinely improve somebody's access to affordable coverage, which strikes almost everybody as backwards when they first encounter it.
This produces a specific and avoidable harm. People occasionally understate their expected income on an application, from caution or embarrassment, and an understated figure can position somebody below a threshold they would otherwise have exceeded. Reporting your honest expected income is both the correct approach and frequently the more advantageous one.
The programs worth applying to regardless
Applying to a state Medicaid program remains worthwhile even where a gap exists, because the eligibility rules encompass considerably more circumstances than most people assume.
Households with children, anybody who is pregnant, and people with a qualifying disability are frequently covered under provisions separate from the general adult rules. Children particularly are often eligible through CHIP even where the adults in the same household are not, which is an outcome many families never discover because nobody applied.
Community health centers additionally provide care on a sliding scale determined by income, and hospitals operate financial assistance programs that substantial numbers of qualifying people never apply for. None of those substitute for insurance, and all of them are genuinely available.
Where to read next
- Losing Medicaid coverage and what to do next
- Cost-sharing reductions, and why Silver carries them
- What the Health Insurance Marketplace is, and who it is for
Coverage rules differ from state to state, so it is worth reading the page for where you live: North Carolina, Florida, Texas, Tennessee, South Carolina, Alabama or Wisconsin.