Effects of Losing Health Insurance Coverage on Labor, Health, and Financial Outcomes
*Names in bold indicate Presenter
This session examines the impacts of losing health insurance coverage on individuals’ labor market, health, and financial outcomes. While a prolific literature studies the benefits of gaining insurance, we know relatively little about the effects of losing coverage. The findings from this panel have important implications for proposed policies that may reduce insurance coverage and generosity. In the spirit of the conference theme, “Rising to the Challenge: Engaging Diverse Perspectives on the Issues and Evidence,” the papers use a variety of empirical methods (including causal inference and descriptive analysis of both survey and administrative data) and examine diverse outcomes spanning the fields of public policy, finance, economics, and public health.
The first two papers assess impacts of Tennessee’s 2005 Medicaid disenrollment, which resulted in coverage loss for 170,000 individuals. The first paper uses credit score data to study the effects of the disenrollment on financial outcomes. The paper finds that the disenrollment reduced credit scores and increased delinquent debt, suggesting significantly negative financial consequences. The next paper studies the effect of the Tennessee disenrollment on child support payments and finds that Medicaid disenrollment reduced the probability that eligible custodial parents received child support payments. Both these papers imply that losing Medicaid worsens financial outcomes for low-income people.
The session proceeds with an analysis of Wisconsin’s 2014 elimination of Medicaid eligibility for parents with incomes between 100 and 200% of the poverty level. These individuals were instead encouraged to enroll in federally subsidized Marketplace plans established by the Affordable Care Act (ACA). The third paper leverages all-payer claims data to study coverage and access to care for low-income individuals covered by public versus subsidized private insurance. The findings inform policymakers of the relevant tradeoffs involved in moving individuals from fully subsidized public coverage to partially subsidized private coverage.
In light of ongoing discussions about conditioning Medicaid eligibility on employment and community engagement (“Medicaid work requirements”), the session concludes by evaluating current levels and sociodemographic predictors of employment and other community engagement activities among potential Medicaid beneficiaries. The paper uses detailed time-use data and finds that 49 percent of low-income people – particularly women, older adults, and those with less education – would not currently satisfy a 20-hour-per week work requirement and could therefore be at risk for losing coverage.
Together, the four papers reach across disciplinary and methodological divides and cover a range of pressing policy issues related to the impacts of losing health insurance coverage. Taken as a whole, they imply that insurance disenrollment harms individuals’ health and financial outcomes. The findings are especially relevant today, as federal and state governments consider policies that could result in large contractions of insurance coverage. For example, several states are implementing Medicaid work requirements, Tennessee disenrolled 128,000 children from its Medicaid program in 2019, and Congress effectively repealed the ACA individual mandate in 2019. The lessons gleaned from these papers can help policymakers understand direct and indirect effects of policies that reduce insurance coverage.