Panel Paper: The Impact of the ACA Medicaid Expansion on Disability Program Participation

Friday, November 3, 2017
Toronto (Hyatt Regency Chicago)

*Names in bold indicate Presenter

Lucie Schmidt, Lara Shore-Sheppard and Tara Watson, Williams College

In addition to providing cash payments, the disability benefit programs Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) offer health insurance to recipients, increasing the value of participating in those programs. However, individuals with disabilities typically must leave their jobs to apply for disability benefits, and may therefore be without health insurance during the disability application process. The Affordable Care Act (ACA) expanded the availability of Medicaid for individuals with family incomes somewhat higher than the means-tested income limits for SSI, changing the relative benefit of participating in disability programs as well as the cost of exiting the labor market to apply for disability program benefits. In this paper, we explore the impact of expanded access to Medicaid through the ACA on participation in disability benefit programs. Using the fact that the Supreme Court decision of June 2012 made the Medicaid expansion optional for the states, we compare changes in countylevel SSI and SSDI caseloads in contiguous county pairs that cross state lines. This approach allows us to focus narrowly on differences arising from the ACA Medicaid expansion choice by
comparing changes over time in outcomes from U.S. counties on either side of a state border in cases where one state expanded Medicaid and the other did not. We find robust evidence of increases in insurance coverage due to the Medicaid expansion using our county border discontinuity identification strategy, of magnitudes similar to those found in previous work. However, our results for disability program participation indicate any effects are small and are limited to effects on SSI. We find that Medicaid expansion increased SSI participation by between 1.5 and 3 percent, with the larger effect occurring in counties with high rates of SSI participation among children prior to the expansion. We find no statistically significant impacts on SSDI caseloads.