State Health Care Expansions – A Powerful Tool for Reducing Poverty

Momentum continues for states to expand access to health care coverage and services for their residents, regardless of their immigration status. Recent research from the Public Policy Institute of California (PPIC) shows that beyond the immediate health benefits, such expansions also play a significant role in combatting poverty, bringing more resources to families and their communities.  

Five states now offer or will offer public and/or private health coverage regardless of a person’s immigration status or age: 

• California implemented public coverage for all low-income residents in January 2024. Advocates are now working towards passage of legislation to facilitate access to private coverage for residents with income over the state’s Medicaid eligibility threshold. 
• Colorado has offered private coverage for all state residents earning up to 300% of the federal poverty level (FPL), with capped subsidies, since January of 2023. In January 2025, public coverage will become available to children and pregnant people regardless of their immigration status. 
• Minnesota is scheduled to begin offering MinnesotaCare for all, based on the state’s Basic Health Program, in January 2025. 
• Oregon has provided public coverage for all low-income immigrants since July 2023. 
• Washington began making private coverage with subsidies available in January 2024, following the approval of the state’s application for a waiver under Section 1332 of the Affordable Care Act (ACA). Medicaid-like coverage for lower-income residents opened in July 2024, but funding for the program is capped. 

In addition: 

• Maryland submitted a federal waiver request in July 2025 that would allow undocumented residents to purchase private coverage in its health insurance marketplace, and 
• New Mexico is in the early stages of implementing its health care affordability fund, which was established in 2021. The legislation requires that part of the fund be spent on insurance programs for residents who are ineligible for Medicaid and ACA coverage.   

It has long been recognized that access to health coverage improves access to appropriate care, which can help patients prevent illness, manage chronic disease, and receive timely diagnoses of treatable conditions. Analysis of the impact of Medicaid expansions under the ACA has shown reductions in medical debt and improvements in broader measures of financial stability. Recent research by PPIC demonstrates that improving access to health coverage can reduce societal poverty rates.  

Over the last decade, PPIC and the Stanford Center on Poverty and Inequality have developed a California Poverty Measure (CPM), modeled on the Census Bureau’s Supplemental Poverty Measure.  The CPM improves upon traditional poverty measures like the federal poverty level by accounting for necessary expenditures like childcare and out-of-pocket health care costs, adjusting for geographic differences in housing costs, and including tax credits, food assistance, and other non-cash benefits in the resources available to help families meet their basic needs. PPIC researchers have created a “health-inclusive” CPM that incorporates the following three factors into the calculation of resources necessary for a family to meet its basic needs: 

1. the value of comprehensive health insurance;
2. out-of-pocket costs for health insurance premiums (net of contributions from employers or government subsidies); and
3. non-premium medical costs.

For families without insurance, only the cost-related factors were considered.  

While the results showed regional and age-related variations in the amount of resources families needed to meet their basic needs, the levels of poverty among people without insurance were at least twice as high as the levels among people with health coverage. The poverty-reduction effects extended to both low-income people covered by Medi-Cal (Medicaid) and people who had family members enrolled in Medi-Cal.  

While the research was completed before California implemented Medi-Cal eligibility for adults between the ages of 26 and 50 in January 2024, the researchers estimated that the eligibility expansion would reduce poverty rates, as measured by the health-inclusive CMP, by 2.9 percent in among non-citizen households and 2.5 percent for households with mixed immigration status. 

At NILC, we believe that all people who live in the U.S. — regardless of immigration or economic status — should have the opportunity to achieve their full potential. Poverty is a barrier to the achievement of this goal.  

The effects of poverty on children are particularly profound. Childhood poverty is associated with substandard housing, hunger, homelessness, inadequate childcare, unsafe neighborhoods, and under-resourced schools. In addition, low-income children are at greater risk than higher-income children for a range of cognitive, emotional, and health-related problems, including detrimental effects on executive functioning, below average academic achievement, poor social emotional functioning, developmental delays, and behavioral problems. These effects persist into adulthood. When compared with individuals whose families had incomes of at least twice the poverty line during their early childhood, adults who were poor as children completed two fewer years of schooling, earned less than half as much, worked far fewer hours per year, received more food stamps, and were nearly three times as likely to report poor health.  

We are all better off when everyone has access to health care. PPIC’s findings on poverty rates are powerful new evidence of that reality.