Final answer:
Medicaid provides healthcare coverage for low-income individuals and has been expanded to include those slightly above the poverty line. The Affordable Care Act further addresses gaps in coverage, reducing the uninsured rate and improving access to healthcare.
Step-by-step explanation:
Individuals who are unable to pay for medical care or have dependent children may qualify for Medicaid, which is a government-run program designed to assist low-income families with healthcare expenses. Through various expansions, states have recognized the necessity of extending Medicaid to cover the near-poor, those earning up to 135% or even 185% of the federal poverty line, as well as ensuring that children do not lose coverage if their parents decide to work. This was vital to avoid the so-called poverty trap, where low-income earners might reject employment for fear of losing health benefits for their families.
For those without Medicaid or employer-provided insurance, the Affordable Care Act (Obamacare) sought to address these issues by expanding coverage, offering subsidies, and creating state-based insurance exchanges. This law also prohibits insurance companies from rejecting individuals with preexisting conditions, lifts payment caps, and allows young adults to remain on their parents' insurance until the age of 26. These reforms aim to reduce the number of uninsured Americans, which used to include millions of children and adults, and mitigate the negative externalities on the overall healthcare system.