Panel Paper: Effects of Medicaid Expansion on Health Insurance Coverage and Poverty Among Adults with Health Challenges

Thursday, November 7, 2019
I.M Pei Tower: Majestic Level, Vail (Sheraton Denver Downtown)

*Names in bold indicate Presenter

Jessica Pac, Jane Waldfogel and Christopher Wimer, Columbia University

Adults with health challenges are dually disadvantaged, in that their health-constrained labor market participation results in limited access to health insurance. The ACA Medicaid expansion set out to reverse this disparity by reducing the barriers to healthcare for those with work-limiting health challenges and to offset their otherwise exorbitant medical out of pocket costs (MOOP). Burgeoning evidence has accredited the ACA Medicaid expansion with increasing health care utilization and reducing out of pocket costs for the newly-eligible population general, among numerous other benefits, although impacts on poverty have been little studied. A key policy question is whether the expansion directly benefited adults with health challenges, the population for whom the ACA is perhaps the most salient. In this paper, we assess the role of the benefit and eligibility expansion portions of the ACA in expanding coverage and reducing poverty for three groups of adults with health challenges: those with self-reported health challenges, those with self-reported work-limiting health challenges, and those with both. We use the March Current Population Survey (ASEC) to construct a sample of adults age 25 to 64 (n= 804,565) to compare insurance uptake, MOOP, SPM poverty, and deep SPM poverty of adults with health challenges to those without in a difference-in-difference framework with state-specific linear time trends. We also harness a synthetic control approach to assess the ITT effect of increased access to Medicaid using a statistically-constructed counterfactual group. Preliminary findings suggest that Medicaid expansion markedly reduced disparities among the most disadvantaged groups of adults with health challenges. Our most conservative estimates suggest that access to Medicaid increased the overall insurance rate by 3.2 percentage points singularly among non-labor force participants with both health and work-limiting health challenges. Similarly, this group experienced a reduction in MOOP upwards of 15 percent, as did labor force participants with work-limiting disabilities (17 percent). Both groups saw a 1.8 percentage point reduction in deep SPM poverty rates, suggesting that the MOOP reductions had a significant effect on overall household budgets. These findings provide practical implications for legislators evaluating the merits of a section 1115 work restriction waiver, laying emphasis on the independent gains – and potential losses – among the most disadvantaged groups of adults.