Fourteen years after the Affordable Care Act made Medicaid expansion optional for states, ten states continue to reject billions in federal funding that could transform their addiction treatment landscape. The decision remains intensely political, but the human cost is measured in lives lost and families destroyed by substance use disorders that go untreated.
The numbers tell a stark story. The federal government covers 90% of expansion costs, with states paying just 10%. Yet governors and legislatures in Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming have declined to expand, even as their communities struggle with the overdose crisis.
According to a February 2025 analysis by KFF, approximately 1.4 million uninsured adults fall into the Medicaid coverage gap in these ten holdout states. They earn too much to qualify for traditional Medicaid in their states but too little to receive subsidized marketplace insurance under the ACA, which doesn’t provide subsidies below the poverty level because the law anticipated mandatory Medicaid expansion. Nearly three-quarters of these individuals live in just three states: Texas (42%), Florida (19%), and Georgia (14%). Overall, 97% of those in the coverage gap live in the South.
The contrast between expansion and non-expansion states is striking. Uninsured rates in the ten holdout states average 14.1%, nearly double the 7.6% rate in the 41 states (plus DC) that have expanded Medicaid.
For people struggling with addiction, this coverage gap can be deadly. Research consistently shows that Medicaid expansion substantially improves access to substance use disorder treatment. Studies examining data from 2014 through 2021 found that expansion increased SUD treatment utilization by roughly 20 to 40 percent compared with non-expansion states. The expansion also led to significant increases in the number of treatment facilities accepting Medicaid and in prescriptions for medication-assisted treatment for opioid use disorder.
Leading treatment facilities like Seasons in Malibu have built comprehensive programs that address the complex factors underlying addiction, but their model requires the kind of sustained care that insurance makes possible. Without coverage, most people battling substance use disorders simply cannot access evidence-based treatment that includes therapy, medication-assisted treatment, counseling, and support services over the months or years often needed for recovery.
The political arguments against expansion haven’t changed much since the Supreme Court made it optional in 2012. Republicans opposing expansion point to long-term budget concerns and question whether Washington will maintain its 90% funding commitment in the decades ahead. They worry about creating dependency on government programs and cite concerns about federal overreach.
Democrats counter that the opposition ignores both fiscal and moral imperatives. They point to data showing that hospitals in non-expansion states face higher uncompensated care costs and greater financial strain, with rural hospitals particularly vulnerable to closure.
The evidence from expansion states complicates the fiscal argument against expansion. Recent evaluations through 2024 find that Medicaid expansion substantially reduced uncompensated care costs and improved hospital operating margins. The Commonwealth Fund’s 2025 State Scorecard on State Health System Performance notes that states that expanded Medicaid report lower uninsured rates and better financial stability of hospitals, particularly in rural areas, compared with non-expansion states.
Some states found creative ways around legislative resistance. Utah voters approved Proposition 3 to expand Medicaid in November 2018, though the state didn’t implement expansion until 2020 after legislative modifications. Oklahoma voters went further, approving State Question 802 as a constitutional amendment in June 2020. Expansion coverage began there on July 1, 2021. These ballot initiatives suggest that when voters get a direct say, they tend to favor expansion.
But the political landscape remains volatile. Twelve expansion states have “trigger” provisions in their laws that would automatically roll back expansion if the federal match rate falls below 90%. These states include Arizona, Arkansas, Illinois, Indiana, Montana, New Hampshire, North Carolina, Utah, and Virginia, with similar structures in Idaho and Iowa. If Congress reduces the federal share, millions could lose coverage overnight in states where expansion passed by narrow margins or through compromise.
That threat became more real in early 2025 when the U.S. House of Representatives passed a budget resolution proposing around $880 billion in Medicaid cuts. A revised proposal aimed to reduce the deficit by $912 billion by 2034, raising concerns among health policy experts about potential coverage losses and increased strain on safety-net providers. The proposals would particularly impact expansion states and could trigger automatic rollbacks in states with matching-rate requirements.
The American Rescue Plan Act of 2021 tried to sweeten the deal for holdout states by offering a temporary five-percentage-point increase in the traditional Medicaid match rate for two years for any state that newly adopted expansion. The temporary nature of this incentive and ongoing federal proposals for cuts have done little to change the calculation in the ten remaining states.
The coverage gap creates arbitrary geographic inequities in who can access addiction treatment. A person making $9,000 a year in Tennessee has no realistic path to treatment coverage. The same person across the border in an expansion state would qualify for Medicaid and could access comprehensive care. Geography becomes destiny.
Research on health outcomes shows the consequences. Studies examining the period from 2014 to the early 2020s found that expansion states generally experienced more favorable overdose trends than non-expansion states, particularly for prescription opioid and heroin deaths. The evidence also shows significant improvements in mental health outcomes and access to treatment for co-occurring disorders. A comprehensive review found a 3.6% decrease in all-cause mortality in expansion states, largely attributed to reductions in deaths from conditions amenable to healthcare intervention, including certain cancers, cardiovascular disease, and liver disease.
The fentanyl crisis has made the stakes even higher. While overdose deaths have risen nationally due to the drug supply’s increasing toxicity, expansion states have been better positioned to respond with evidence-based treatment. Medicaid is the single largest payer for substance use disorder services in the United States, and people with coverage are far more likely to receive the sustained, comprehensive treatment that saves lives.
Public health experts continue making their case with data and studies. They calculate lives that could be saved and costs that could be reduced. The Robert Wood Johnson Foundation’s 2023 analysis of the ten holdout states documented the substantial coverage gains and economic benefits expansion would bring.
But in ten state capitals, the political calculation hasn’t shifted. Medicaid expansion remains a proxy battle over the size of government and the legacy of the Affordable Care Act. For Republican legislators in these states, supporting expansion often means risking a primary challenge. The policy specifics matter less than the symbolism.
The human toll accumulates while the politics stay frozen. The overdose crisis accelerates. Methamphetamine surges in rural areas that already lack treatment infrastructure. The gap between need and available care widens every year in states that continue to say no to expansion.
Perhaps the calculation will eventually change as the crisis touches more families across every demographic. Healthcare systems in non-expansion states continue straining toward a breaking point. The evidence keeps accumulating.
For now, whether someone struggling with addiction can access life-saving treatment depends on which side of a state line they call home. That remains a strange way to respond to a public health emergency. The ten states still holding out have made their priorities clear, even as the federal government offers to pay 90% of the bill.
