The Effect of Disenrollment from Medicaid on Employment, Insurance Coverage, and Health Care Utilization

This study examines the effect of a Medicaid disenrollment on employment, sources of health insurance coverage, health, and health care utilization of childless adults using longitudinal data from the 2004 Panel of the Survey of Income and Program Participation. In July 2005, TennCare, the Tennessee Medicaid program, disenrolled approximately 300,000 adults following a change in eligibility rules. Following the change in rules, the fraction of childless adults in Tennessee covered by Medicaid fell by almost 7 percentage points while uninsured rates increased by roughly 5 percentage points. There is no evidence of an increase in employment rates among childless adults following disenrollment though there is some evidence of a decrease in part-time employment and an increase in work-preventing disabilities. Self-reported health and access to medical care worsened as hospitalization rates, doctor visits, and dentist visits all declined. At the same time, there were increases in the use of free or public clinics, the use of the emergency room, and out-of-pocket medical expenses. The results suggest that undoing the expansion of Medicaid eligibility to childless adults that occurred under the ACA would likely reduce health insurance coverage, reduce health care access, and worsen health but will not lead to increases in employment.