Adults in the Medicaid coverage gap face one of the most frustrating structural problems in American health care: they earn too little to qualify for ACA marketplace subsidies (which require income at or above 100% FPL), but their state has not adopted Medicaid expansion, so they do not qualify for Medicaid either. In 2026, 100% of the Federal Poverty Level is $15,960 per year for a single adult. Coverage gap adults earn somewhere below that, often between $5,000 and $15,000, frequently from informal work, part-time employment, or seasonal labor. Nine states have not expanded Medicaid, leaving roughly 1.4 million uninsured adults in this limbo, with Texas alone accounting for about 42% of the total coverage gap population, according to KFF data.
Coverage gap residents are not the same as the general uninsured low-income adult population. In expansion states, any adult with income up to 138% FPL qualifies for Medicaid directly. Coverage gap adults specifically live in Alabama, Florida, Georgia (partial expansion only via Pathways), Kansas, Mississippi, South Carolina, Tennessee, Texas, or Wyoming. Each of these states maintains Medicaid eligibility at very low income thresholds, typically covering only pregnant women, parents of minor children, and adults with qualifying disabilities. Non-disabled, childless adults in non-expansion states often have no public coverage option at any income level below 100% FPL.
Your 4 Real Options
Available options| Option | Best for | Typical cost in 2026 |
|---|
| FQHC sliding-fee primary care | All coverage gap adults for routine and preventive care | $0 to $50 per visit on sliding-fee scale |
| Traditional Medicaid (if eligible exception applies) | Pregnant women, parents of minor children, adults with disability | $0 or very low cost if approved |
| Catastrophic plan with hardship exemption | Coverage gap adults under 30 OR with approved hardship exemption, outside CA/CT/MD/DC | $100 to $250/month premium; $10,600 deductible in 2026 |
| CHIP for dependent children | Any children under 19 in the household regardless of parent's coverage gap status | $0 to $50/month per child in most states |
Coverage gap adults below 100% FPL ($15,960 single, $33,000 family of four in 2026) are not eligible for the ACA Premium Tax Credit. Moving to an expansion state, gaining qualifying income above 100% FPL, or qualifying for a traditional Medicaid exception are the primary paths out of the coverage gap.
Source: KFF, HealthCare.gov, HRSA, CMS
Option 1: FQHC Sliding-Fee Primary Care
Federally Qualified Health Centers (FQHCs) are the primary safety net for coverage gap residents in non-expansion states. FQHCs receive federal funding under the Health Center Program (Section 330 of the Public Health Service Act) and are legally required to provide care regardless of a patient's ability to pay. Adults with income at or below 100% of the Federal Poverty Level ($15,960 single in 2026) qualify for the lowest tier of the FQHC sliding-fee scale, which may mean $0 to $20 per visit for primary care, preventive services, mental health, dental, and some specialty care. FQHCs cannot turn away coverage gap adults due to lack of insurance or inability to pay. The federal locator at findahealthcenter.hrsa.gov covers more than 1,400 FQHC grantees operating over 15,000 sites nationwide.
FQHCs do not provide insurance. Coverage gap adults who use an FQHC for primary care are still uninsured for hospital admissions, specialist visits outside the FQHC network, emergency care, and prescription drugs not dispensed at the FQHC pharmacy. Coverage gap residents should use FQHCs as their routine-care foundation, then pursue an FQHC 340B prescription discount program for medications and county hospital charity care programs for inpatient needs. Some FQHCs also provide limited specialty referrals and imaging through partner networks. Ask the FQHC enrollment counselor for a full list of covered services at your specific site.
Option 2: Traditional Medicaid Exception Categories
Non-expansion states still operate traditional Medicaid programs that cover certain categories of adults at very low income thresholds. Coverage gap adults should check each of these categories because qualifying for any one of them eliminates the gap entirely. Pregnant women in non-expansion states typically qualify for pregnancy Medicaid at up to 200% FPL ($31,920 single pregnant woman in 2026), and coverage extends through 60 days postpartum in most states. Parents or caretakers of minor children may qualify at income thresholds ranging from 18% FPL in Texas ($2,873 annually for a single-parent household of two in 2026) to 56% FPL in other states. Adults with a qualifying disability (as defined by Social Security) may qualify for Medicaid tied to SSI or SSDI benefits. Coverage gap uninsured adults should apply directly with their state Medicaid agency, as online eligibility screens often underscreen for these categories.
Option 3: Catastrophic Plan with Hardship Exemption
In 2026, the Centers for Medicare and Medicaid Services (CMS) expanded the catastrophic plan hardship exemption to include people who live in a non-expansion state and fall into the coverage gap, effective for the 2026 plan year. Coverage gap adults who qualify for this hardship exemption can enroll in a marketplace catastrophic plan without meeting the standard age-under-30 requirement. Catastrophic plans have very low premiums (typically $100 to $250 per month for a coverage gap adult in a Southern state in 2026) but carry the maximum out-of-pocket deductible: $10,600 for an individual or $21,200 for a family in 2026. The plan covers three primary care visits per year before the deductible, plus all ACA-required preventive services at no cost. This option is NOT available in California, Connecticut, Maryland, or the District of Columbia, where state-specific rules restrict catastrophic plan sales.
To claim the catastrophic plan hardship exemption as a coverage gap adult in 2026, select 'Hardship 14: You experienced another hardship' in Section 2 of the hardship exemption form on HealthCare.gov and explain that you live in a state that did not adopt Medicaid expansion and are ineligible for marketplace subsidies due to income below 100% FPL. Coverage gap residents enrolling in catastrophic plans should understand these plans are primarily useful for protecting against catastrophic medical events (major hospitalization, surgery, cancer diagnosis), not for routine care. Pair the catastrophic plan with FQHC primary care visits for day-to-day health needs.
Option 4: CHIP for Children in the Household
Children in coverage gap households are not stuck in the same gap. The Children's Health Insurance Program (CHIP) covers children up to age 18 (19 in some states) with household income up to 200% to 300% FPL depending on the state, regardless of the parent's own coverage gap status. In 2026, 200% FPL for a family of three is $54,640. All non-expansion states still operate CHIP programs, and coverage is available year-round without a special enrollment period. Uninsured low-income adults in the coverage gap should apply for CHIP for their children even while they themselves remain uninsured. CHIP applications go through the same state Medicaid agency. Coverage gap parents with children who have not applied for CHIP often leave no-cost or very-low-cost coverage for their children on the table.
Traps That Cost Medicaid Gap Residents Thousands
Coverage gap adults are an aggressively targeted segment for non-insurance products marketed as 'health coverage.' These are the most dangerous products that look cheap but leave you exposed:
Common traps for Medicaid Gap Residents| Trap | Why to avoid |
|---|
| Health share ministries (Medi-Share, Sedera, Liberty HealthShare) | NOT insurance. No legal obligation to pay your claims. Pre-existing conditions, mental health, and substance use are routinely excluded. Coverage gap adults who experience a major illness while relying on a health share often face six-figure medical debt with no consumer protection. |
| Short-term limited-duration plans | Not required to cover pre-existing conditions. Can cap lifetime or annual benefits below the ACA essential health benefits standard. Sold aggressively in non-expansion states because coverage gap adults cannot get subsidized marketplace plans. A single hospitalization can leave a $50,000 to $200,000 balance bill. |
| Fixed indemnity plans marketed as primary coverage | Pay a flat dollar amount per event (for example, $100 per hospital day, $50 per ER visit). Actual hospital bills routinely run $3,000 to $30,000 per day. These plans are sold at low premiums because they pay almost nothing. Not a substitute for real insurance. |
| Assuming you cannot move to get coverage | Moving from a non-expansion state to an expansion state creates a Marketplace Special Enrollment Period (SEP). On the effective date of the move, you are eligible for Medicaid if your income is below 138% FPL ($22,025 single in 2026) in the new state. Coverage gap adults who move to states like Virginia, Missouri, or North Carolina (all expansion states) often qualify for Medicaid immediately after establishing residency. |
Always verify any plan is sold on HealthCare.gov or your state's official marketplace. If a broker offers off-marketplace coverage to someone in the coverage gap at a very low premium, ask directly: 'Is this an ACA-compliant plan?' If the answer is no, walk away.
Source: KFF, CMS, Consumer Reports, CBPP
Why coverage gap adults cannot get a Premium Tax Credit (PTC) in 2026
The Premium Tax Credit (PTC) has a hard income floor: in non-expansion states, marketplace subsidies are available only to adults with projected annual income at or above 100% of the Federal Poverty Level. In 2026, 100% FPL is $15,960 for a single adult, $21,640 for a household of two, and $33,000 for a family of four. Coverage gap adults earn below these thresholds, which is exactly what locks them out of both Medicaid and the Premium Tax Credit simultaneously. Congress designed the law assuming all states would expand Medicaid to cover adults up to 138% FPL, making the 100%-to-138% band a redundant safety net. When 10 states declined to expand, the gap opened. The PTC is not available to anyone in the gap, regardless of how low their income is. This is not a phase-down situation: for coverage gap residents in non-expansion states, premium tax credits are zero at all income levels below 100% FPL.
Coverage gap residents who experience a qualifying life event that raises their income above 100% FPL (such as taking a new job, getting married, or adding a second household earner) become instantly eligible for both the marketplace Special Enrollment Period (SEP) and the Premium Tax Credit. The 60-day SEP window starts from the income-qualifying event date. For coverage gap adults whose income fluctuates (seasonal workers, informal-economy workers, gig workers), tracking income carefully is worth the effort: crossing the 100% FPL threshold unlocks marketplace access. Form 1095-A reconciles marketplace subsidies at tax time; coverage gap adults who underestimate income and receive zero advance credits can still claim the PTC on their tax return if their year-end MAGI landed above 100% FPL.
2026 Coverage Gap Income Thresholds by Household Size| Household Size | 100% FPL (2026): PTC floor | 138% FPL (2026): Medicaid expansion threshold |
|---|
| 1 | $15,960 | $22,025 |
| 2 | $21,640 | $29,863 |
| 3 | $27,320 | $37,702 |
| 4 | $33,000 | $45,540 |
| 5 | $38,680 | $53,378 |
| 6 | $44,360 | $61,217 |
| 7 | $50,040 | $69,055 |
| 8 | $55,720 | $76,894 |
| Each additional person | +$5,680 | +$7,838 |
Coverage gap = income BELOW the 100% FPL column. The gap exists only in non-expansion states. In expansion states, income between 100% and 138% FPL qualifies for Medicaid; income above 138% FPL qualifies for ACA marketplace subsidies. The 138% FPL column uses 2026 HHS poverty guidelines ($15,960 base x 1.3797 = $22,025 rounding per federal register guidance).
Source: HHS ASPE 2026 Poverty Guidelines, HealthCare.gov
Non-expansion states in 2026: which states have the coverage gap
Nine states have a true Medicaid coverage gap in 2026: Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, and Wyoming. Wisconsin covers adults up to 100% FPL through BadgerCare Plus and technically has no coverage gap despite not adopting full ACA expansion. Georgia is a partial-expansion state: Georgia Pathways to Coverage requires 80 hours per month of qualifying work or community activity and covers adults up to 100% FPL. As of March 2026 only about 16,000 people were enrolled in Pathways, versus the estimated 359,000 who would gain coverage under full expansion. Coverage gap adults in Georgia should apply for Pathways if they meet the work requirement, but should not rely on it as their sole resource given the administrative burden and low enrollment rates.
Texas accounts for roughly 617,000 adults in the coverage gap, the largest share of any single state. Florida has approximately 270,000 coverage gap adults, Georgia approximately 195,000, and the remaining six states together account for the balance of the estimated 1.4 million total. Coverage gap uninsured adults are disproportionately Hispanic and Black, reflect Southern labor market patterns (agricultural workers, domestic workers, informal-economy workers), and are more likely to be between the ages of 19 and 54. About 97% of all coverage gap adults in 2026 live in Southern states, per KFF analysis.
HSA and FSA fit for coverage gap adults in 2026
Health Savings Accounts (HSAs) are available to coverage gap adults ONLY if they enroll in an HSA-qualifying High-Deductible Health Plan (HDHP). For 2026, an HSA-qualifying HDHP must have a minimum deductible of $1,700 for self-only coverage or $3,400 for family coverage (IRS Rev. Proc. 2025-19, May 2025). Catastrophic plans sold on the marketplace automatically satisfy the HDHP minimum-deductible requirement for HSA purposes (their deductible equals the ACA out-of-pocket maximum of $10,600 in 2026, which well exceeds the $1,700 minimum). A coverage gap adult who obtains the catastrophic plan hardship exemption can pair their catastrophic plan with an HSA, contributing up to $4,400 for self-only or $8,750 for family coverage in 2026, plus a $1,000 catch-up if age 55 or older. HSA contributions are above-the-line deductible on Schedule 1 of Form 1040 and reduce MAGI, which could help a marginal-income coverage gap adult climb above the 100% FPL threshold on paper.
Flexible Spending Accounts (FSAs) are employer-sponsored accounts, not available to coverage gap adults who are not working for an employer that offers an FSA benefit. Most coverage gap adults, who frequently work informally, part-time, or in sectors that do not offer benefits, will have no access to an FSA. The HSA is the only tax-advantaged account relevant to coverage gap adults, and only if they pair a catastrophic plan with HSA contributions. The triple tax advantage (tax-deductible contributions, tax-free growth, tax-free qualified withdrawals) can help coverage gap adults who do obtain catastrophic plan coverage build a cushion for medical expenses against the high deductible.
Form 7206 does not apply to coverage gap adults
Form 7206 (Self-Employed Health Insurance Deduction) does not apply to coverage gap adults because most coverage gap adults have no self-employment income to deduct against. Form 7206 is available only to people with net self-employment earnings, typically Schedule C filers, S-corporation shareholders, and partners, who pay premiums for a marketplace or direct-purchase plan. Coverage gap adults who earn income from informal work or small amounts of 1099 income below the self-employment tax threshold generally cannot use Form 7206. For coverage gap adults who do file Schedule C and have net self-employment income, the Form 7206 deduction would reduce federal income tax but would NOT reduce self-employment tax on Schedule SE. However, the 100% FPL income threshold for marketplace subsidy eligibility is based on MAGI, which is calculated after the Form 7206 deduction. A coverage gap adult with a small amount of self-employment income and high health premiums could theoretically lower their MAGI below 100% FPL by claiming the Form 7206 deduction, which would paradoxically keep them in the coverage gap rather than help them out of it.
Marketplace Special Enrollment Period (SEP) triggers for coverage gap adults
Coverage gap adults face limited marketplace SEP options because the standard marketplace SEP requires a qualifying life event AND income at or above 100% FPL to access premium tax credits. However, the marketplace SEP window is 60 days from a qualifying life event regardless of subsidy eligibility, meaning coverage gap adults who experience a qualifying event can enroll in a marketplace catastrophic plan (with hardship exemption) or in a full-price marketplace plan within 60 days. Loss of Medicaid coverage is itself a qualifying SEP event and gives coverage gap adults who lose any form of Medicaid (pregnancy Medicaid, Pathways, temporary eligibility) a 60-day window to transition to a marketplace plan or seek an FQHC as primary care provider.
Coverage gap adults should know that the low-income SEP (which previously allowed year-round enrollment for people under 150% FPL without a qualifying event) was eliminated by HHS rulemaking effective August 25, 2025, and is suspended through the end of 2026. This means that outside of open enrollment (November 1 through January 15, 2027) and qualifying life events, coverage gap adults cannot enroll in a marketplace plan. Medicaid itself has no enrollment period restriction: coverage gap adults can apply for traditional Medicaid exceptions (pregnancy, disability, parent of minor child) at any time of year through their state Medicaid agency.
- Loss of Medicaid or CHIP coverage (including end of pregnancy Medicaid, end of Pathways enrollment): 60-day SEP window
- Permanent move to a new state: 60-day SEP window (moving to an expansion state may qualify for Medicaid directly at 138% FPL)
- Marriage or adding a dependent: 60-day SEP window; household size change may push income above 100% FPL threshold
- Gaining qualifying income above 100% FPL: triggers eligibility for marketplace PTC via income-change SEP if enrolled mid-year
- Becoming a citizen or gaining lawfully-present immigration status: 60-day SEP window
- Open Enrollment Period (November 1 through January 15, 2027): the only time coverage gap adults can enroll in a marketplace catastrophic plan or full-price plan without a qualifying event
How to apply for FQHC care and available Medicaid categories in 2026
Coverage gap adults who need health care have a clear starting sequence. Step 1: Go to findahealthcenter.hrsa.gov and enter your zip code to find the nearest FQHC. Call the FQHC directly and ask whether they are accepting new patients, whether they have a sliding-fee discount program, and what documentation is needed to confirm income for the fee scale. Step 2: Contact your state Medicaid agency to ask whether you qualify for any traditional Medicaid category (pregnancy, disability, parent of minor child). In non-expansion states, do not assume you are ineligible without asking directly, since online screening tools frequently miss edge-case eligibility. Step 3: If you have children under 19 in your household, apply for CHIP through the same state Medicaid agency. CHIP applications are accepted year-round. Step 4: If your income is close to 100% FPL or fluctuates above it, check HealthCare.gov to see whether you qualify for a marketplace plan with a Premium Tax Credit.
- Documents to bring to the FQHC: photo ID, proof of income (most recent pay stub, tax return, or written statement if informal income), proof of address, Social Security number if available (not required for sliding-fee enrollment)
- Documents for state Medicaid application: birth certificate, proof of identity, Social Security number, proof of income, proof of citizenship or immigration status, proof of residency
- Common reasons Medicaid applications are denied in non-expansion states: income above the specific category threshold (pregnant women, parents), failure to document citizenship or lawful presence, residency dispute, outstanding eligibility review requirement
- If Medicaid denies your application: request a formal denial notice, which may describe the specific reason and your appeal rights (typically 30 to 90 days to appeal); contact your local legal aid office for free assistance with Medicaid appeals in non-expansion states
Frequently Asked Questions
What is the cheapest health insurance option for people in the Medicaid coverage gap in 2026?
For coverage gap adults in 2026, the cheapest path to primary care is a Federally Qualified Health Center (FQHC) on a sliding-fee scale, which may cost $0 to $20 per visit. FQHCs do not provide insurance but cover routine and preventive care without requiring it. For actual insurance coverage against a major medical event, coverage gap adults in non-expansion states outside CA, CT, MD, and DC can apply for a hardship exemption on HealthCare.gov and enroll in a marketplace catastrophic plan, with typical premiums of $100 to $250 per month and a $10,600 deductible in 2026. No ACA-compliant plan with comprehensive coverage is available at below-100% FPL income without a subsidy in non-expansion states.
Do people in the Medicaid coverage gap qualify for the Premium Tax Credit?
No. The ACA Premium Tax Credit (PTC) requires income at or above 100% of the Federal Poverty Level ($15,960 single in 2026). Coverage gap adults earn below that threshold, which is why they fall into the gap: they cannot get Medicaid (state did not expand) and they cannot get marketplace subsidies (income below 100% FPL). The PTC is zero for coverage gap adults at any income level below 100% FPL. If a coverage gap adult's income rises above 100% FPL during the year, they immediately become eligible for a marketplace Special Enrollment Period (SEP) and can claim a PTC going forward.
Can a coverage gap adult deduct health insurance premiums on taxes using Form 7206?
Form 7206, the self-employed health insurance deduction, does not apply to most coverage gap adults because they typically lack net self-employment income. Form 7206 is designed for Schedule C filers, S-corp shareholders, and partners who pay their own premiums. Coverage gap adults who do have some self-employment income can use Form 7206 for any premiums paid, but the deduction reduces income tax only, NOT self-employment tax on Schedule SE. Additionally, reducing MAGI via Form 7206 on a small income that is already near 100% FPL could push the MAGI below 100% FPL, which would make the person ineligible for marketplace subsidies rather than helping them.
Can people in the Medicaid coverage gap use an HSA?
Coverage gap adults can use an HSA only if they enroll in an HSA-qualifying High-Deductible Health Plan (HDHP). The 2026 HDHP minimum deductible is $1,700 for self-only coverage and $3,400 for family coverage (IRS Rev. Proc. 2025-19). Marketplace catastrophic plans automatically qualify as HDHPs for HSA purposes since their deductible equals the ACA out-of-pocket maximum ($10,600 in 2026). A coverage gap adult who obtains a catastrophic plan via hardship exemption can open and fund an HSA, contributing up to $4,400 for self-only or $8,750 for family coverage in 2026. Flexible Spending Accounts (FSAs) are employer-only and not available to most coverage gap adults, who are not in traditional W-2 employment with benefits.
What if I am in the Medicaid coverage gap but my income fluctuates above 100% FPL?
Income that fluctuates above 100% FPL ($15,960 single in 2026) unlocks ACA marketplace subsidy eligibility. If you are in the coverage gap but expect your annual income to land at or above 100% FPL, apply for a marketplace plan through HealthCare.gov. Subsidies phase down as income climbs toward 400% FPL ($63,840 single in 2026) and stop at 400%. If your income turns out to be below 100% FPL at year-end, your Form 1095-A will show advance credits you were not entitled to, and you will owe them back on your tax return. Coverage gap adults whose income is genuinely close to the 100% FPL threshold should consult a navigator or tax professional before enrolling with advance credits.
When can someone in the Medicaid coverage gap enroll in a marketplace plan?
Coverage gap adults can enroll in a marketplace catastrophic plan (with hardship exemption) or a full-price plan during the Open Enrollment Period, which runs November 1 through January 15, 2027, for 2027 coverage. Outside of open enrollment, they can enroll within 60 days of a qualifying life event: loss of any Medicaid coverage (including pregnancy Medicaid or Georgia Pathways), permanent move to a new state, marriage, birth of a child, or gaining lawful immigration status. The low-income SEP (year-round enrollment for income under 150% FPL) was suspended effective August 25, 2025 and is not available in 2026. Medicaid itself has no enrollment period, so coverage gap adults can apply for traditional Medicaid exception categories at any time.
Can someone in the Medicaid coverage gap get a catastrophic plan in 2026?
Yes, in most states. CMS expanded the catastrophic plan hardship exemption in 2025 to include coverage gap adults in non-expansion states. To qualify, select 'Hardship 14: You experienced another hardship' during marketplace enrollment on HealthCare.gov and explain you live in a state without Medicaid expansion and have income below 100% FPL. Catastrophic plans have very low premiums (often $100 to $250 per month in Southern states in 2026) but high deductibles: $10,600 individual or $21,200 family for 2026. The plan covers three primary care visits per year before the deductible and all preventive services at no cost. This option is NOT available in California, Connecticut, Maryland, or DC. Pair a catastrophic plan with FQHC primary care for day-to-day needs and use the catastrophic plan only for major events.
What states have the Medicaid coverage gap in 2026?
Nine states have a true Medicaid coverage gap in 2026: Alabama, Florida, Georgia (partial only via Pathways program with work requirements), Kansas, Mississippi, South Carolina, Tennessee, Texas, and Wyoming. Texas accounts for roughly 42% of the 1.4 million coverage gap adults nationally, followed by Florida and Georgia. Wisconsin covers adults up to 100% FPL through BadgerCare Plus and does not have a coverage gap despite not adopting full ACA expansion. If you move to any of the 41 expansion states (including Virginia, North Carolina, Missouri, and many others), you would qualify for Medicaid directly if your income is below 138% FPL ($22,025 single in 2026).
