October 1, 2020

Jana Plat
(202) 861-1270

Washington, D.C. — Today, Business Forward issued a report explaining how layoffs caused by COVID-19 will worsen the “Medicaid gap” crisis in Texas – one of the 12 states that refuses to expand Medicaid to cover its most vulnerable working families. The Business Case for Expanding Medicaid in Texas explains how the Medicaid gap originated, why eliminating the gap is a good deal for Texas, and how Republicans’ long overdue alternative (replacing the Affordable Care Act (ACA) with block grants) is even less likely in the aftermath of this pandemic. 

“Under the ACA’s Medicaid expansion provisions, it costs a state just 10 cents to deliver an extra dollar of healthcare to its neediest working families,” said Jim Doyle, president of Business Forward. “For eight years, Republican legislatures resisted expanding Medicaid on the grounds they were going to replace the ACA with something better, but there’s no replacement in sight, and Republicans’ favorite concept – block grants to states – has become unworkable during a pandemic.”

The report cites analysis from the Kaiser Family Foundation, which found that, before COVID-19, 878K workers and their families living in Texas have fallen into the Medicaid gap. Layoffs caused by the pandemic could cause another 382K Texans to join them.

The ACA was designed to help workers with lower incomes obtain healthcare in one of two ways: (1) it gave workers earning $17,600 or more discounts to help them afford their own policies on the ACA marketplace; and, (2) it gave workers earning less than $17,600 access to basic healthcare through Medicaid (at no charge). When the GOP sued to overturn the ACA, the Supreme Court granted partial relief, including a ruling that allowed states to opt-out of expanded Medicaid. Twenty-four states initially refused to expand Medicaid, but only 12 still do. Out of these remaining 12, Texas is home to the largest population of people who fall into the Medicaid gap.

Since President Trump took office, seven states have overruled their Republican state legislatures and expanded Medicaid (by referendum or by electing a pro-Medicaid, Democratic majority): Idaho, Maine, Missouri, Nebraska, Oklahoma, Utah, and Virginia. 

“The Trump Administration should be working with Congress and state legislatures to eliminate the Medicaid gap and make it easier for Americans losing their employer-sponsored insurance to enroll in the ACA,” said Doyle. “Instead, they’re making it harder for Americans to enroll in the ACA — and making it impossible for low-income workers and their families to qualify for Medicaid.”


1. The Affordable Care Act (ACA) helped workers with lower incomes obtain healthcare coverage in one of two ways:  (1) it gave workers earning $17,600 or more discounts to help them afford their own policies on the ACA marketplace; and, (2) it gave workers earning less than $17,600 access to basic healthcare through Medicaid 
(at no charge).

2. In other words, the ACA expanded Medicaid to cover workers with very low incomes who otherwise couldn’t afford coverage on their own. It’s critical for workers in low-paying fields, “gig” economy workers, and Americans dealing with disabilities.

3. Medicaid expansion is a good deal for states. The Federal government covers 90% of new costs; states cover 10%. In other words, it costs a state 10 cents to deliver $1 of new care to some of its hardest working families.

4. Moreover, providing that extra $1 of care can reduce the state’s healthcare spending in other areas (which offsets that 10 cents they spend). Some states expanding Medicaid have seen their overall healthcare spending drop. 

5. Republicans sued to overturn the ACA. The Supreme Court rejected most claims, but accepted a few. This left the ACA with big holes that created unintended consequences.

6. Medicaid expansion is one of those holes and 22 states (all led by the GOP) initially refused to join — and 12 still do. In those 12 states, 2.6 million workers and their families are stuck in what experts call the “Medicaid gap.

7. Since President Trump took office, voters in six states have overruled their GOP legislatures and expanded Medicaid themselves (ID, ME, MO, NE, OK, UT). In Virginia, voters voted Republicans out of office and replaced them with pro-Medicaid expansion Democrats.

8. Mass layoffs caused by COVID-19 are making the Medicaid gap problem worse. An additional 1.9 million Americans in these states who’ve lost their job could soon fall into the Medicaid gap.

9. Republicans  have opposed expanding Medicaid on the grounds they will soon offer a replacement for the ACA. But it’s been eight years, and they have yet to propose a replacement, let alone pass one. Political calculations that may have worked in 2012 could soon cost 4.5 million Americans their health insurance.



With the help of more than 60 of America’s most respected companies, Business Forward is making it easier for more than 100,000 business leaders from across America to advise Washington on how to create jobs and accelerate our economy. Business Forward is active in over 125 cities and has worked with more than 650 mayors, governors, members of Congress, and senior Administration officials.

Business leaders who have participated in our briefings have seen their suggestions implemented in the Affordable Care Act, the JOBS Act, the Clean Power Plan, the Toxic Substances Control Act, presidential budgets, and three trade agreements. Many have also shared their recommendations with their representatives in Congress and through phone calls, op-eds, and interviews with local media. Ninety-eight out of 100 business leaders who have participated in a Business Forward briefing would be interested in participating in another one.