The Impact of State Paid Sick Leave Mandates on Medicaid-financed Prescription Medications

The United States lacks a federal paid sick leave policy. However, 18 states and the District of Columbia have adopted or announced paid sick leave employer mandates to increase access to this benefit, creating a quasi-experimental setting to study whether paid sick leave affects healthcare use. People enrolled in Medicaid are an important population to study in terms of state paid sick leave policies as the majority of non-disabled enrollees are employed, but frequently work in jobs without paid sick leave. Given enrollees’ lower incomes, losing earnings to receive healthcare may be a significant barrier to care. In this study, we examine the effect of state paid sick leave policies on Medicaid-financed dispensed prescription medications. Using difference-in-differences methods that are robust to bias associated with a staggered treatment rollout, we show that Medicaid-financed dispensed prescription medications increase by 6.7% following adoption of a state paid sick leave policy. These findings suggest that state paid sick leave policies promote engagement with the healthcare system and use of healthcare services among financially constrained populations.