More Evidence that Medicaid Expansion Improves the Lives of Low-Income Parents

As we have talked about in a number of papers, Medicaid expansion is good for parents and children. Thanks to the “welcome mat” effect, states choosing to expand Medicaid coverage to parents also help reduce the number of uninsured children. A new study in Health Services Research, Medicaid Expansions from 1997 to 2009 Increased Coverage and Improved Access and Mental Health Outcomes for Low-Income Parents, provides additional evidence that Medicaid eligibility expansions improves the lives of low-income parents.

Using data from the National Health Interview Survey (NHIS), researchers examined the effect of state decisions to expand Medicaid to more low-income parents between 1997 and 2009. Did parents have better access to care and better health outcomes when eligibility expansions led to more parents enrolling in affordable coverage?

The data, overwhelming and unsurprisingly, indicated that increasing Medicaid eligibility in the late 1990s and early 2000s has led to better coverage, improved access to care, lower health care costs, and improved mental health conditions for parents.

Specifically, the study tells us that increasing Medicaid eligibility thresholds by 100 percentage points (e.g., from 20 percent of the FPL to 120 percent of the FPL) led to:

  • Lower rates of uninsurance among parents
    • A 10.5 percentage point increase in the share of low-income parents with Medicaid and a 7.2 percentage point decrease in the share of low-income parents without
  • Improved access to care
    • There was a reduction in unmet need for medical care, prescription medication, and mental health care.
  • Reduced health care costs
    • There was a 4.9 percentage point reduction in family out-of-pocket spending of $500 or more in the past year and a 2.5 percentage point reduction in family out-of-pocket spending of $2,000 or more.
  • Improved mental health outcomes
    • There was a 2.1 percentage point decrease in the number of parents experiencing moderate psychological distress and an increase in parents with no or mild psychological distress.

Researchers also projected what the impact would be if all states expanded Medicaid and found similar – and exaggerated – results. If all states expanded Medicaid to cover parents up to 138 percent of the FPL, there would be coverage gains, reductions in unmet needs, lower out-of-pocket spending, and fewer parents with psychological distress. Non-expansion states saw larger predicted improvements by these measures than expansion states.

The mental health of parents affects the health and well-being of children. More than half of all infants living in poverty have a mother with depression. States that expand Medicaid are better able to treat parents with mental health conditions, leading to a decrease in hospitalizations related to mental health. In Oregon, rates of depression decreased by 30 percent for those who gained Medicaid coverage.

The ACA has led to a 6.4 percentage point increase in coverage for parents between June/September 2013 and March/September 2015. This decline in uninsurance, as this study indicates, could be dramatically lower. In the 20 states that have yet to expand Medicaid, the median eligibility levels are 42% of FPL as of January 2016. This report adds to the growing body of research that shows expanding Medicaid dramatically improves the lives of parents and children.