I thought I had health insurance for the entire year. There was a time when my Medicaid was turned into a "spend-down" medicaid. It looks like because I didn't use it those months, it's showing I didn't have insurance coverage. Can I claim an exemption fo

You do not mention how many months you were without coverage. If it was three months or less, you can avoid the penalty through the "short gap" provision of the law.

Tax penalties apply to each individual uninsured adult or child in a household. If a person is uninsured for only part of the year, the penalty is prorated to cover only the uninsured months. No penalty is assessed for a "short gap," an uninsured period less than three months long. You are only allowed one short gap per year.

For more detailed information, please see this TurboTax Tax Guide Affordable Care Act Decoded.