Research Update: How Has Medicaid Expansion Impacted Workers?

This week, I am reading research showing that there may be links between the Medicaid expansion and trends in employer-sponsored insurance, labor force participation and employment.

Health Affairs’ Employer-Sponsored Insurance Stable For Low-Income Workers In Medicaid Expansion States

Urban Institute researchers used data from the Health Reform Monitoring Survey between July 2013 and March 2017 to analyze trends in employer-sponsored insurance (ESI) in expansion and non-expansion states for non-elderly adults.

What it finds

  • There was no statistically significant change in the share of adults with ESI in both expansion and non-expansion states during the study’s time period. In addition, there were no significant changes in firms offering ESI and take-up rates of ESI in both expansion and non-expansion states.
  • There were no significant changes during the time period in the share of workers with an offer of ESI, regardless of household income and firm size. However, the ESI take-up rate increased significantly at large firms for both lower and higher income workers.
  • In expansion states, there was a significant gain in public coverage of 20.5 percentage points and a significant decline in the rate of uninsured of 22.7 percentage points.

Why it matters

  • The study finds no evidence that the Medicaid was crowding out ESI, as ESI trends remained stable or improved. At the same time, expansion states had an increase in public coverage and a decrease in the rate of uninsured.
  • It is possible that the ACA may have even bolstered ESI. The authors note the stability in ESI that occurred between 2013 and 2017 is new; the percent of low-income workers with ESI was falling before 2014.

Public Finance Review’s Economic Freedom and the Affordable Care Act

This study uses data from the Current Population Survey from 2008 through 2016 to analyze labor market effects of the Medicaid expansion. It suggests that the Medicaid expansion may promote work by providing a stable source of health insurance.

What it finds

  • There was a small increase in labor force participation in expansion states compared to non-expansion states. Among the population below 138 percent of the federal poverty level (FPL), there was an increase in employment compared to the same population in non-expansion states. These effects were concentrated among white and Hispanic women. There were no changes observed for African American women, but there were for African American men.
  • In addition, rates of self-employment increased for white women in expansion states compared to white women in non-expansion states, indicating a reduction in job lock for this population.

Why it matters

  • Medicaid expansion may promote work, as expansion states had a statistically significant increase in labor force participation and an increase in employment for the population below 138 percent FPL, compared to non-expansion states. However, it is important to note that the findings vary significantly by race and gender.
  • The results indicate that the ACA did not restrict workers’ labor market autonomy.