Association for Public Policy Analysis & Management

As many U.S. states continue to opt-out of the expansion of Medicaid under the Affordable Care Act (ACA), there is intense debate about the costs of Medicaid expansions to states and the benefits of Medicaid to low-income adults. One question that has been largely ignored in this debate is whether Medicaid expansions to working-age adults have the potential for beneficial spillover effects on other populations.  We investigate the impact of ACA Medicaid expansions to working-age adults on seniors eligible for but not enrolled in Medicaid, a population we refer to as “eligible for dual enrollment” or EDEs. We hypothesize that Medicaid expansions to working-age adults may increase Medicaid program participation among EDEs by raising awareness of program benefits, facilitating enrollment, and/or reducing the stigma of program participation. While prior studies have documented “welcome mat” effects, these studies focus on increases in participation by working-age Medicaid-eligible adults (Sommers and Epstein, 2011; Sommers, Kenney, and Epstein, 2014), and no prior study has examined welcome mat effects in the context of Medicare beneficiaries who also qualify for Medicaid. We also examine the general health status of those EDEs who actually enroll in Medicaid and document whether the average health of the enrolled population changes with state Medicaid expansions to working-age adults. The results from this investigation will provide insight into whether Medicaid expansions lead to welcome mat effects that enable EDEs to gain access to enhanced healthcare benefits (e.g., assistance with out-of-pocket spending or coverage for some nursing facility care).

We use American Community Survey (ACS) data which records information regarding health insurance and measures of disability. Identification of causal effects comes through exogenous variation in coverage expansions to working-age adults across states and over time. We use data from 2008 to 2014, beginning prior to ACA implementation and ending after the ACA was fully implemented. This focus allows us to examine the effect of the early Medicaid expansions, implemented in 2010 and 2011, as well as expansions that occurred after January 1, 2014, when the ACA was fully implemented. As of April 5, 2016, 32 states and Washington, DC had adopted the Medicaid expansion. We construct a sample of respondents aged 65 and older and eligible for Medicaid. We estimate difference-in-difference models of Medicaid program participation and general health or disability (controlling for a rich set of covariates) to estimate potential welcome mat effects of coverage expansions. 

Our work will have important implications for the complex and high-cost population of those eligible for dual enrollment, a large fraction of whom do not receive benefits that may improve health.  Welcome mat effects for the EDE population have the potential to be large, since studies show that only one-third to one-half of those eligible for both programs enroll in Medicaid (Pezzin and Kasper, 2002; Ungaro and Federman, 2009). Since the complex needs of this group make them particularly vulnerable to problems arising from inadequate access, policies that increase Medicaid participation by EDEs may have important consequences for health.