This paper provides new empirical evidence on the employment and earning effects of the recent Medicaid expansion. Unlike most existing studies that use a conventional state and year fixed effects approach, our main identification strategy is based on the comparison of employment and wages in contiguous county-pairs in neighboring states (i.e. border counties) with different Medicaid expansion status. Using the 2008-2016 Quarterly Census of Employment and Wages, we estimate a set of distributed lag models in order to examine the dynamic effects of Medicaid expansion. Results from our preferred specification suggest a small but statistically significant decrease in employment of 1.3 percent one year after the Medicaid expansion. This disemployment effect is transitory and appears to primarily occur in low-wage sectors. In particular, employment returns to pre-expansion levels within two years. We also do not find any statistically significant effect of the Medicaid expansion on wages at any point.
The Effects of Medicaid Expansion on Labor Market Outcomes: Evidence from Border Counties by Lizhong Peng, Xiaohui Guo, Chad D. Meyerhoefer :: SSRNOctober 19, 2018
Medicaid Expansion and Intensity of Treatment: Increased Cost in the Emergency Department by Shooshan Danagoulian, Allen C. Goodman, Alexander Janke, Phillip Levy :: SSRNOctober 18, 2018
We estimate the impact of the ACA Medicaid expansion on the intensity of treatment in the emergency department. We conduct a visit level analysis with a difference-in-differences specification for the number of procedures, number of diagnoses, and visit characterization according to the NYU Algorithm using the State Emergency Department Databases (SEDD) for six states in 2013-2014. Our results show that in expanding states the number of procedures increased by up to 0.27 per visits (3.9%), and the number of diagnoses declined by up to 0.10 diagnoses per visit. While we remain agnostic about the mechanism for the increase in procedures, we believe increasing reimbursements motivates providers to perform more procedures, or bill more carefully, or both. We also find evidence of changing composition of visit type, with an increase in non-preventable emergency visits and primary care treatable visits. This increase is particularly strong among patients who were uninsured in 2013. We estimate that the additional procedures cost $248 million, constituting at least 3.1% of the total medical expenditure associated with the expansion in the four expanding states in our study. We conclude that the provider side response in treatment presents a substantial additional cost to expanding insurance coverage with fee-for-service payment structure, and should be accordingly included in projected costs of future insurance expansions.
Is the opioid epidemic attributable to prescription painkillers being more accessible or to opioid substitutes being less accessible ? I find that the state-level decision to increase access to prescription painkillers by expanding Medicaid under the Affordable Care Act increased both opioid prescriptions and in opioid-related deaths. These results vary strongly by demography, being driven largely by deaths of white men without college degrees. A back of the envelope calculation suggests that, for an average county, Medicaid expansion caused approximately 2,800 more people to be insured per year, 175,000 more opioid units to be prescribed per year, and 4 additional opioid-related deaths per year. Overall, opioid accessibility shocks explain about 12,000 opioid deaths per year, or nearly a third of the overall death toll. I also find that the state-level decision to legalize recreational Marijuana (a substitute painkiller) reduced opioid- related deaths. Overall, these opioid-substitute accessibility shocks also explain about 12,000 opioid deaths per year. I conclude that policy-makers can achieve reductions in opioid mortality without restricting access to opioids.
Medicaid and the Labor Supply of Single Mothers: Implications for Health Care Reform by R. Vincent Pohl :: SSRNSeptember 16, 2018
The Medicaid expansions and health insurance subsidies of the Affordable Care Act (ACA) change work incentives for single mothers. To evaluate the employment effects of these policies ex ante, I estimate a model of labor supply and health insurance choice exploiting variation in pre‐ACA Medicaid policies. Simulations show that single mothers increase their labor supply at the extensive and intensive margin by 12% and 7%, respectively, uninsurance rates decline by up to 40%, and an average family’s welfare improves by 1,600 dollars per year. Health insurance subsidies and not Medicaid expansions mostly drive these effects.
This essay, part of a symposium investigating methods of empirically evaluating health policy, focuses on American health care federalism, the relationship between the federal and state governments in the realm of health care policy and regulation. We describe the results of a five year study of the implementation of the Patient Protection and Affordable Care Act (ACA) from 2012-2017. Our study focused on two key pillars of the ACA, which happen to be its most state-centered — expansion of Medicaid and the implementation of health insurance exchanges — and sheds light on federalism in the modern era of nationally-enacted health laws that preserve key roles for state leadership. The full study is detailed in the Stanford Law Review; here, we offer a more accessible snapshot and highlight a key aspect of the research: interviews of approximately twenty high ranking former state and federal officials at the forefront of ACA implementation.
The interviews corroborate the study data and substantiate our conclusions about the defining characteristics of the ACA’s implementation from a federalism perspective. Specifically, we found that the ACA’s implementation process has been 1) dynamic; 2) pragmatic; 3) negotiated; and 4) and marked by intrastate politics. We observed waves of engagement and estrangement between states and the federal government, and state decisions to participate in the ACA’s programs have not been binary, in/out choices. Vertical and horizontal negotiation and copying have been near constants.
The findings also reveal theoretical and empirical challenges for quantitatively evaluating health care federalism. Does it exist? Is it successful? We found the traditional federalism attributes pop up in inconsistent ways under the ACA and emerge from virtually every structural arrangement of the law. We tried, for instance, to measure how “cooperative” the states were, only to find that concept meaningless. Some states attempted implementation but failed; other states rebelled by refusing to run their own programs at all. The federal government stepped in for both. Were such states equally “cooperative” or “autonomous”? The same challenges occurred for all of the classic federalism metrics. For example, we saw local experimentation emerge from every kind of governance structure under the ACA, including nationalist ones.
Our work leads us to a key question: Why choose federalism-oriented health reform models in the first place? In ACA implementation, it sometimes appeared that federalist arrangements did not aim to improve health outcomes but rather reflected “federalism for federalism’s sake”—federalism to advance political or constitutional values, such as reserving power to the states in the interest of sovereignty and balance of power — regardless of the effect on health care coverage, cost, quality, or other measures of health policy success. At other times, it seems federalism was intended as a means to an end — e.g., that state-led health policy is assumed to produce better health outcomes. In the end, we were able to conclude more assuredly that the ACA’s many structural arrangements served state power than that any particular one of those arrangements was more federalist or that any particular one produced better health policy. Clearly, we cannot evaluate federalism — whether it exists, whether it is working, whether it is worth defending — without knowing what it is for in the first place.
With the ACA in its fifth year of full expansion, we now have an established track record in the expanding states to help estimate what the actual costs of expansion will be to the states and how those costs have compared to states’ projections. This Issue Brief reviews that evidence, and evaluates continuing claims by Medicaid opponents that expansion is a “proven disaster” for state budgets. The strong balance of objective evidence indicates that actual costs to states so far from expanding Medicaid are negligible or minor, and that states across the political spectrum do not regret their decisions to expand Medicaid.
I study job lock and job push, the twin phenomena believed to be caused by employment-contingent health insurance (ECHI). Using variation in Medicaid eligibility among household members of male workers as a proxy for shifts in workers’ dependence on employment for health insurance, I estimate large job lock and job push effects. For married workers, Medicaid eligibility for one household member results in an increase in the likelihood of a voluntary job exit over a four-month period by approximately 34%. For job push, the transition rate into jobs with ECHI among all workers falls on average by 26%.