The effect of expanding Medicaid eligibility on SSI program participation

The Supplemental Security Income (SSI) program provides cash assistance to poor adults with disabilities.   Concerns about the program’s effects on labor supply and asset accumulation incentives have surrounded SSI since its inception.  The coupling of eligibility for cash assistance with eligibility for health insurance benefits through Medicaid exacerbates these concerns-- particularly for adults without dependent children for whom Medicaid coverage has been otherwise unavailable.    In this paper, we use the natural experiments created by state decisions to expand Medicaid to nondisabled, nonelderly adults without dependent children to study the effect of decoupling eligibility for cash assistance from eligibility for public health insurance.  We collected data on the income eligibility limits, enrollment caps, and coverage characteristics of state expansions of Medicaid to adults without dependent children from 2001-2013.  We combine these data with the nationally representative American Community Survey and use a difference-in-differences study design to identify the effects of state Medicaid eligibility expansions on SSI participation.  We find declines in SSI participation caused by Medicaid expansions of 0.2 percentage points relative to the average baseline SSI participation rate of 2.73%; this is a percentage decline of 7%.  Our findings offer a preview of the potential consequences of ACA Medicaid expansions on participation in SSI and provide insight into the relative value of health insurance coverage and cash benefits for low-income adults with disabilities.