Association for Public Policy Analysis & Management

The most common source of health insurance for young college students is an employer-sponsored plan, which they qualify for as a dependent (likely through their parents). However, among college students who either do not qualify for their parent's insurance or whose parents do not have health insurance, gaining access to health insurance can be a challenge. Our paper examines whether providing a new source of affordable health insurance to college students leads to better health insurance coverage and improved progress toward degree completion and academic achievement. Our analysis focuses particularly on independent or low-income students, who are most likely to be burdened by health insurance and health care costs and also most at risk of dropping out.

There are many confounding factors in the relationship between health insurance access and postsecondary education outcomes that make causal relationships difficult to estimate. Our analysis overcomes these challenges by using the fact that to date, 31 states and the District of Columbia have expanded Medicaid eligibility under the Affordable Care Act (ACA) of 2010, which means that students with family incomes below 133 percent of the federal poverty level in expansion states became covered by health insurance through Medicaid, while otherwise similar students in non-expansion states did not. This quasi-random variation allows us to avoid the influence of many confounding factors by estimating a difference-in-differences model that compares the change in academic performance and progress to degree completion of college students in expansion states after they gained access to health insurance to this change for college students in non-expansion states over the same time period. We use data from the American Community Survey (ACS) for the period 2008 – 2016 for our analysis of health insurance- and employment-related outcomes and data from the National Postsecondary Student Aid Study (NPSAS) for our analyses of employment- and education-related outcomes.

Our results show that in the three years following the 2014 Medicaid expansions, there was a three to five percentage point increase in Medicaid coverage for college students in expansion states relative to those in non-expansion states. The effect was even larger for independent students, whose Medicaid coverage increased between six to nine percentage points for students in expansion states relative to those in non-expansion states. During this same time period, there was a 1 to 3 percentage point decrease in private coverage for college students in expansion states relative to those in non-expansion states, suggesting that some students may be dropping their private health insurance coverage in favor of Medicaid coverage, although health insurance coverage rates increased overall. We also examine the degree to which the Medicaid expansions led to changes in employment hours, higher college attendance intensity and GPAs and reduced student loans for college students.