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The Redistributive Effects of Federal Medicaid Outlays Across Counties: Evidence from the ACA

Author

Listed:
  • Laura Montenovo
  • Kosali I. Simon
  • Coady Wing

Abstract

We examine how Medicaid expansion under the Affordable Care Act reshaped federal transfer inflows to counties using state Medicaid expansions between 2014 and 2017. We show that the ACA expansion increased federal Medicaid transfers by $361 per capita in expansion counties. Using our estimates, we forecast that non-expansion counties would gain $554 per capita if they expanded Medicaid. These transfers flow to counties with lower tax capacity and lower gross income. Our findings suggest that Medicaid expansion was a health policy intervention that also functioned as a budgetary mechanism reshaping federal to local transfers and fiscal smoothing across U.S. counties.

Suggested Citation

  • Laura Montenovo & Kosali I. Simon & Coady Wing, 2026. "The Redistributive Effects of Federal Medicaid Outlays Across Counties: Evidence from the ACA," NBER Working Papers 34758, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34758
    Note: EH PE
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    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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