Coverage Impacts of Early State Medicaid Expansions under Health Reform

The Affordable Care Act expands Medicaid in 2014 to millions of low-income adults in states that choose to participate.  Since 2010, several states have taken advantage of the law’s option to expand coverage earlier to a portion of low-income childless adults.  We present new data on these expansions for four states, with potential implications for the 2014 expansions.  First, using administrative records, we document that the ramp-up of enrollment was gradual and linear over time in three of the four states; enrollment continued to increase steadily nearly 3 years into the expansion in the two states with the earliest expansions.  Second, we use survey data from the American Community Survey to analyze the coverage impacts of the two earliest expansions, in a differences-in-differences framework.  Using the Northeast Census region as the control group for Connecticut, and Virginia as a control for the District of Columbia, we find strong evidence of increased Medicaid coverage in Connecticut (4.9%, p<0.001) and positive but weaker evidence of increased Medicaid in Washington D.C. (3.7%, p=0.08). Enrollment was greatest among individuals with health-related limitations, and among higher-income adults in D.C.  We find evidence for some crowd-out of private coverage (accounting for 30-40% of the increase in Medicaid coverage) in Connecticut, but crowd-out patterns were heterogenous.  Crowd-out was nearly 100% among healthier and younger adults, compared to just 12% among individuals with health problems.  We detected a positive spillover effect on Medicaid enrollment for previously-eligible parents in Connecticut, though there was no similar effect in D.C., where participation rates among eligible adults were already extremely high before the expansion.