Association for Public Policy Analysis & Management

This study provides early evidence on the impact of the Affordable Care Act (ACA) on prescription drug utilization. Beginning January 2014, the ACA has expanded Medicaid eligibility for low-income individuals. As of July 2015, 29 states including Washington DC have adopted these expansions. ACA Medicaid enrollees, who were previously ineligible for Medicaid, are likely to have undiagnosed health conditions and unmet health care needs. Therefore, coverage gain under the ACA Medicaid expansions may lead to higher utilization of medical care among this population. Here, we use newly available aggregate prescription drug data covering 2013-2014 from a large national dataset of all-payor prescription drug claims. Using a quasi-experimental research design, by exploiting both within- and across-state variation in exposure to the expansion, we find that within the first year of implementation, the ACA Medicaid expansions led to higher Medicaid prescription drug utilization in the states that implemented Medicaid expansion relative to non-expansion states. Additionally, we find that the effect is stronger for drugs classes that are expected to be more commonly used by the newly eligible population. Moving forward we will also add more recent data from 2015 to produce estimates as the expansions continue to roll-out.