The Impact of Expanding Public Health Insurance on Safety Net Program Participation: Evidence from the ACA Medicaid Expansion

As the safety net is a nexus of public programs addressing a partially overlapping set of needs and serving a partially overlapping set of beneficiaries, the expansion of public insurance eligibility to groups previously ineligible for Medicaid and to higher income levels among some previously eligible groups may have spillover effects to other public assistance programs. The Affordable Care Act (ACA) expanded the availability of Medicaid to individuals previously ineligible or to individuals previously eligible but at lower means-tested income limits. Such an expansion has several potential impacts on participation in cash and food programs. First, individuals may be induced to reduce their income below the Medicaid income limit, potentially increasing cash and food program participation. Alternatively, the newly increased income limit relative to previous limits for some groups could allow more earnings while still qualifying for Medicaid, potentially reducing cash and food program participation. Finally, expanding Medicaid access may draw individuals’ attention to the existence of public programs and/or reduce the marginal cost of enrolling in additional programs while enrolling in Medicaid.

In this paper, we explore the impact of expanded access to Medicaid through the ACA on participation in cash and food programs, in particular, the Earned Income Tax Credit (EITC) and the Supplemental Nutrition Assistance Program (SNAP). We use the fact that the Supreme Court decision of June 2012 made the Medicaid expansion optional for the states, but we focus on identification of the effect of the Medicaid expansion by comparing changes in county-level measures of EITC and SNAP participation in contiguous county pairs that cross state lines where the county on one side of the border experienced the Medicaid expansion and the county on the other side did not. This approach allows us to focus narrowly on differences arising from the ACA Medicaid expansion choice, abstracting from potential heterogeneity in trends across broader geographic areas. We also exploit preexisting differences in Medicaid generosity for parents and non-parents across states. We use county-level data on SNAP participation reported to the US Department of Agriculture (for a subset of states) and county-level data on the number of tax returns claiming the EITC from the Internal Revenue Service Statistics of Income.

Our preliminary estimates for SNAP indicate that the Medicaid expansion led to an increase in SNAP participation, although our estimates are very noisy and only statistically significant in counties with high levels of uninsurance prior to the expansion. This is consistent with results from the Oregon experiment (Baicker et al. (2014)). Similarly, our preliminary estimates for EITC participation indicate that Medicaid expansion is associated with an increase in the number of returns with an EITC claim per working adult, but only in previously high uninsurance counties.

These preliminary results suggest that access to one safety net program may increase participation in others, highlighting the important connections across the safety net.