Last Updated- October 2017:

Health Care Coverage Options at the Minimum Wage

How do non-employer-based health care coverage options vary by state for adults earning the minimum wage?

Select a family type to see how options vary for the adults in the family:
Options this adult is eligible for:

 Medicaid   Premium Tax Credits (PTCs) and Cost-Sharing Reductions (CSRs)   Basic Health Program 
Options this adult is eligible for:

 Medicaid   No Options 
Options these adults are eligible for:

 Medicaid   Premium Tax Credits (PTCs) and Cost-Sharing Reductions (CSRs) 

Overview

In the United States, employment does not guarantee health insurance. The number of private employers offering health care coverage has shrunk from 66% in 1999 to 56% in 2016. A portion of their employees cannot afford the continually increasing cost-sharing that comes with employer plans. And for those who do not have an employer-based option, buying coverage on their own can be cost-prohibitive.


Therefore many will lean on public health coverage and assistance programs: Medicaid, the Children’s Health Insurance Program (CHIP), Basic Health Programs, or premium tax credits and cost-sharing reductions to help with the costs of Affordable Care Act (ACA) marketplace plans. But which of these programs are within reach of people making minimum wage?


This edition of the ACA Spotlight maps the coverage options available by state for six different family configurations. For each family configuration, we have compared the family’s annual household income at the minimum wage with income limits for the programs listed above. The maps display health coverage program eligibility for the adults, while pop-up boxes display eligibility for both the adults and children. The different family configurations can be selected using the navigation buttons and include:


  • One working adult
  • One working adult and one child (age 10)
  • One working adult and two children (ages 10 and 5)
  • Two working adults and one child (age 10)
  • Two working adults and two children (ages 10 and 5)
  • Two adults (one working and one a caretaker) and two children (ages 10 and 5)

While the federal minimum wage has been at $7.25 since 2009, states and municipalities can require more than this. For this analysis, we have used minimum wage at the state level for those working 35 hours per week for 50 weeks a year.


What is the relationship between income and eligibility for these programs? It varies widely depending on the minimum wages and income limits for these programs in a state. For those working full time at minimum wage year round:


  • In Georgia and Wyoming, an adult living alone would not qualify for any of the options listed above.
  • Meanwhile in Alaska and Louisiana, the same adult living alone would qualify for Medicaid. In New York, he or she would be eligible for New York’s Basic Health Program.
  • For a family with two adults and two children, in 24 states the adults would be eligible for premium tax credits and cost-sharing reductions on ACA marketplace plans, while those in the remaining 26 states plus DC would be eligible for Medicaid.

This shows how much variability working adults have in terms of their options for coverage when their employers either do not offer coverage or offer coverage that is too expensive. What an adult working at minimum wage qualifies for in one state can be drastically different than what he or she is eligible for elsewhere.


Note that, as of September 2017, six states have submitted waivers to the Centers for Medicare and Medicaid Services (CMS) to add work requirements to Medicaid eligibility. If such waivers are approved, potentially many more adults than represented in these maps would have fewer or no health coverage options.


At-A-Glance: State ACA Decisions

State Minimum wage per hour of work Annual earnings of one adult working
35 hours per week and 50 weeks per year
State expanded Medicaid to childless adults?
Alabama $7.25 $12,688 No
Alaska $9.80 $17,150 Yes
Arizona $10.00 $17,500 Yes
Arkansas $8.50 $14,875 Yes
California $10.50 $18,375 Yes
Colorado $9.30 $16,275 Yes
Connecticut $10.10 $17,675 Yes
Delaware $8.25 $14,438 Yes
District of Columbia $12.50 $21,875 Yes
Florida $8.10 $14,175 No
Georgia $7.25 $12,688 No
Hawaii $9.25 $16,188 Yes
Idaho $7.25 $12,688 No
Illinois $8.25 $14,438 Yes
Indiana $7.25 $12,688 Yes
Iowa $7.25 $12,688 Yes
Kansas $7.25 $12,688 No
Kentucky $7.25 $12,688 Yes
Louisiana $7.25 $12,688 Yes
Maine $9.00 $15,750 No
Maryland $9.25 $16,188 Yes
Massachusetts $11.00 $19,250 Yes
Michigan $8.90 $15,575 Yes
Minnesota $9.50 $16,625 Yes
Mississippi $7.25 $12,688 No
Missouri $7.70 $13,475 No
Montana $8.15 $14,263 Yes
Nebraska $9.00 $15,750 No
Nevada $8.25 $14,438 Yes
New Hampshire $7.25 $12,688 Yes
New Jersey $8.44 $14,770 Yes
New Mexico $7.50 $13,125 Yes
New York $9.70 $16,975 Yes
North Carolina $7.25 $12,688 No
North Dakota $7.25 $12,688 Yes
Ohio $8.15 $14,263 Yes
Oklahoma $7.25 $12,688 No
Oregon $10.25 $17,938 Yes
Pennsylvania $7.25 $12,688 Yes
Rhode Island $9.60 $16,800 Yes
South Carolina $7.25 $12,688 No
South Dakota $8.65 $15,138 No
Tennessee $7.25 $12,688 No
Texas $7.25 $12,688 No
Utah $7.25 $12,688 No
Vermont $10.00 $17,500 Yes
Virginia $7.25 $12,688 No
Washington $11.00 $19,250 Yes
West Virginia $8.75 $15,313 Yes
Wisconsin $7.25 $12,688 No
Wyoming $7.25 $12,688 No

Sources: Minimum wage rates are from the US Department of Labor (DOL). Under the Fair Labor Standards Act, the federal minimum wage is $7.25 per hour. Workers in states with a minimum wage higher than $7.25 per hour are entitled to the higher wage. State Medicaid expansion statuses are from the Kaiser Family Foundation.

Background

Medicaid, CHIP, and federal subsidies on ACA marketplace plans (premium tax credits and cost-sharing reductions) help low- and middle-income individuals and families access health care coverage. Under the ACA, states can establish a Basic Health Program for those whose income is near the threshold between Medicaid eligibility and eligibility for federal subsidies on marketplace plans. As of September 2017, only Minnesota and New York have created Basic Health Programs. Eligibility for federal subsidies on marketplace plans and the Basic Health Program are determined at the federal level and therefore are uniform across the country. Eligibility for Medicaid and CHIP varies by state, however, because states may expand eligibility above the required minimum income levels set by the federal government. (See the Additional Resources below for past ACA Spotlight installments that explore states’ varying income limits for Medicaid and CHIP.)


The maps show that in some states, low-income childless adults may have no options. Expanding Medicaid eligibility to childless adults with incomes at or below 138% of the federal poverty level (FPL) was originally a requirement of the ACA. However, the US Supreme Court ruled in 2012 that states were not required to do so. As of September 2017, 19 states have not expanded Medicaid eligibility to this group of adults.


The federal minimum wage requires all employers in the private sector and federal, state, and local governments to pay covered nonexempt workers a minimum of $7.25 an hour effective July 2009. States, counties, and cities may require employers pay their hourly workers a higher minimum wage. This ACA Spotlight calculates a household’s annual income based on the minimum wage in each state. (Higher minimum wages required at the county or city level are not reflected.)


Because both minimum wages and health insurance program income limits vary by state, coverage options for minimum-wage workers and their families depend on where they live. This ACA Spotlight illustrates the coverage options available in each state for the adults in the six different family configurations in the navigation buttons.


Methodology

This ACA Spotlight provides information by state on health insurance programs available to six households configurations when one or more adults work full time for the minimum wage:


  • One working adult
  • One working adult and one child (age 10)
  • One working adult and two children (ages 10 and 5)
  • Two working adults and one child (age 10)
  • Two working adults and two children (ages 10 and 5)
  • Two adults (one working and one a caretaker) and two children (ages 10 and 5)

The maps display health coverage program eligibility for the adults in one of the six family configurations. Pop-up boxes display eligibility for the children.


The minimum wage used for each state in this ACA Spotlight is based on data from the Department of Labor (DOL). For states with no defined minimum wage or a minimum wage below the federal minimum wage, under the Fair Labor Standards Act the federal minimum wage applies and is reflected in this ACA Spotlight. Based on the US Census Bureau’s Current Population Survey (CPS) definition, full-time, year-round work is at least 35 hours per week for at least 50 weeks per year.


To determine how much income a family earns annually, this ACA Spotlight multiplies for each adult in the family a state’s minimum wage by 1,750 hours. These total annual earnings and the size of the family are then compared against a state’s income limits for Medicaid, CHIP, federal subsidies for marketplace plans (premium tax credits and cost-sharing reductions), and if the state has one, the state’s Basic Health Program.


The income thresholds for Medicaid and CHIP eligibility in this ACA Spotlight are based on data from CMS. Please note:


  • Only Modified Adjusted Gross Income (MAGI) types of Medicaid and CHIP coverage are included in this here.
  • The Medicaid and CHIP data used here, unlike the CMS data, incorporate the 5% income disregard applied to all forms of MAGI Medicaid and CHIP coverage.
  • Medicaid eligibility rules for childless adults are used for the “one working adult” map. For the adults in all other maps, Medicaid eligibility rules for parents/caretakers are used. In states that expanded Medicaid eligibility to childless adults under the ACA, if the state’s parent/caretaker Medicaid income limit is lower than the Medicaid expansion limit, then the Medicaid expansion limit is used instead.

Social Interest Solutions (SIS) produced the data and maps using the MAGI Cloud platform, which includes a comprehensive rules engine that can generate ACA eligibility results across all states and across the full spectrum of health insurance options, including Medicaid, CHIP, and Qualified Health Plans (QHPs) with and without premium tax credits and cost-sharing reduction subsidies. Learn more about the MAGI Cloud platform.

Additional Resources