Access to Health Insurance and the Utilization of Medical Care: Evidence from the 2010 ACA Extension of Health Insurance to Young Adults

The Affordable Care Act of 2010 expanded health insurance coverage to young adults by allowing them to remain as dependents on their parent’s private health insurance until they turn 26 years. We study the implications of this expansion for inpatient medical care using 2007 to 2011 Nationwide Inpatient Sample (NIS) data.  We follow prior literature by using non-pregnancy related visits as our main sample. Our identification strategy is a difference-in-difference method that compares targeted young adults aged 23 to 25 to individuals aged 27 to 29, a comparison group that is excluded from the expansion.

We look at two aspects of inpatient healthcare utilization that are most likely to be impacted by the expansion. First, we consider the impact of the mandate on how many young adult are hospitalized after the expansion. The second aspect we consider is the effect of the mandate on mental illness admissions.  For both types of utilization, we analyze the impact of the mandate on admissions that originate from the ER and those that did not originate from the ER. We also evaluate the impact of the law on treatment intensity as measured by length of stay, number of procedures and hospital charges.

We find that compared to other adults, targeted young adults increased their overall (non-pregnancy related) inpatient visits by 3.5%. The increase in visits applied to both sources of admission. Inpatient visits that originate from the ER increased by 2.9% while those that did not originate from the ER increased by 4.6%.  Inpatient visits for mental illness were significantly impacted by the mandate. We find a 5.5% increase in the overall number of visits mainly due to a 7.1% increase in the number of admissions through the ER. In exploring the heterogeneous impact of the law, we find that accounting for prior state laws does not change the magnitude of our estimates, suggesting that the federal expansion had a stronger impact than state laws. Consistent with a positive correlation between income and private health insurance, we find that young adults who reside in affluent zip codes account for a significant portion of our estimates. We also find small inconsistent results on the impact of the law on length of stay, number of procedures, and total charges.