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

Listed author(s):
  • Jacqueline Fiore

    ()

    (Department of Economics, Tulane University)

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 economic impact of the expansion on all possible health care services. Among the 21 services assessed, I find that after the expansion became effective, five services utilized by the target population for the reform experienced a statistically significant increase in average Medicaid spending: dental services (211 percent), clinic services (101 percent), outpatient hospital services (77 percent), physician and surgical services (35 percent), and inpatient hospital services (17 percent). This implies 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.

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File URL: http://econ.tulane.edu/RePEc/pdf/tul1706.pdf
File Function: First Version, Jul 2017
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Paper provided by Tulane University, Department of Economics in its series Working Papers with number 1706.

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Date of creation: Jul 2017
Handle: RePEc:tul:wpaper:1706
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  1. Molly Frean & Jonathan Gruber & Benjamin D. Sommers, 2016. "Premium Subsidies, the Mandate, and Medicaid Expansion: Coverage Effects of the Affordable Care Act," NBER Working Papers 22213, National Bureau of Economic Research, Inc.
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  8. Yaa Akosa Antwi & Asako S. Moriya & Kosali Simon, 2013. "Effects of Federal Policy to Insure Young Adults: Evidence from the 2010 Affordable Care Act's Dependent-Coverage Mandate," American Economic Journal: Economic Policy, American Economic Association, vol. 5(4), pages 1-28, November.
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  11. Kosali Simon & Aparna Soni & John Cawley, 2016. "The Impact of Health Insurance on Preventive Care and Health Behaviors: Evidence from the 2014 ACA Medicaid Expansions," NBER Working Papers 22265, National Bureau of Economic Research, Inc.
  12. Gary Solon & Steven J. Haider & Jeffrey M. Wooldridge, 2015. "What Are We Weighting For?," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 301-316.
  13. Currie, Janet & Gruber, Jonathan, 1996. "Saving Babies: The Efficacy and Cost of Recent Changes in the Medicaid Eligibility of Pregnant Women," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1263-1296, December.
  14. Michael Anderson & Carlos Dobkin & Tal Gross, 2012. "The Effect of Health Insurance Coverage on the Use of Medical Services," American Economic Journal: Economic Policy, American Economic Association, vol. 4(1), pages 1-27, February.
  15. Mohamad M. Al-Ississ & Nolan H. Miller, 2013. "What Does Health Reform Mean for the Health Care Industry? Evidence from the Massachusetts Special Senate Election," American Economic Journal: Economic Policy, American Economic Association, vol. 5(3), pages 1-29, August.
  16. Charles Courtemanche & James Marton & Benjamin Ukert & Aaron Yelowitz & Daniela Zapata, 2016. "Impacts of the Affordable Care Act on Health Insurance Coverage in Medicaid Expansion and Non-Expansion States," NBER Working Papers 22182, National Bureau of Economic Research, Inc.
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