Association for Public Policy Analysis & Management

We estimate the impact of Medicaid coverage expansions on the employment of adults with disabilities using the American Community Survey (ACS) from 2010 through 2016. Expanded access to health insurance might have encouraged some with disabilities, particularly those who otherwise might have sought federal disability benefits, to seek employment after having not worked. But, more options for coverage might have led employment rates to decrease if newly expanded Medicaid coverage reduced “job lock” and allowed workers with disabilities to exit the labor force. We hypothesize that the positive effect on employment will dominate the negative effect, in general.

Our study accounts for the fact that the effect of Medicaid expansions might have varied at the state level and generates a carefully selected comparison group for each state. We estimate results at the national and state level. An earlier study by Hall et al. (2017) compared all expansion states to non-expansion states and did not detect a differential change in employment in Medicaid expansions relative to the change in non-expansion states. Yet, the services and supports for work available to people with disabilities varies widely at the state level, and so too might have the effect of newly available insurance coverage. Specifically, we use inverse probability weighting using characteristics of geographic areas within states to refine the comparison sample to be more similar on observable characteristics than all non-expansion states. This more carefully constructed counterfactual allows us to estimate impacts under the assumption that the post-expansion employment rate of individuals with disabilities would have been expected to be the same, but for the Medicaid expansion.