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The Impact of the Affrodable Care Act's Medicaid Expansion on Medicaid Spending by Health Care Service Category

Author

Listed:
  • Jacqueline Fiore

    () (Department of Economics, Tulane University)

Abstract

The 2014 Medicaid expansion revised Medicaid eligibility provisions to allow for low-income, non-elderly adults to be eligible for Medicaid in those states which opt for this change. During the first two years after the expansion, there were more than 10.7 million newly eligible Medicaid enrollees nationwide. I investigate the short-term impact the 2014 Medicaid expansion had on Medicaid spending by the government. Using data from the Centers for Medicare and Medicaid Services on all Medicaid expenditures over a seventeen year period, I apply a difference-in-differences design to exploit the variation among states electing to participate in the expansion and the health care services they offer. These data allow me to study the fiscal impact of the expansion on all possible health care services. I find that the expansion increased total Medicaid spending by 10% in participating states, but this masks the substantive heterogeneity in Medicaid spending across the 21 health care service categories. Most notably, dental and clinic services increased by 106 and 81 percent, respectively. The service categories experiencing a significant impact after the expansion suggest that the new adult group may be healthier and seeking more routine or preventive care compared to the traditional Medicaid population. The increase in routine and preventive care has the potential to result in better health outcomes and fewer medical emergencies in the future, ultimately lowering Medicaid spending by the state and federal government over the long term.

Suggested Citation

  • Jacqueline Fiore, 2017. "The Impact of the Affrodable Care Act's Medicaid Expansion on Medicaid Spending by Health Care Service Category," Working Papers 1706, Tulane University, Department of Economics, revised Feb 2018.
  • Handle: RePEc:tul:wpaper:1706
    as

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    File URL: http://econ.tulane.edu/RePEc/pdf/tul1706r.pdf
    File Function: Revised Version, February 2018
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Affordable Care Act; Medicaid expansion; non-elderly adults; expenditures;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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