The Impact of Affordable Care Act Medicaid Expansions on Dual Eligible Beneficiaries of Medicare and Medicaid: Analysis of Administrative Data

In this paper, we analyze whether recent Medicaid expansions under the Affordable Care Act (ACA) increased Medicaid enrollment among Medicare enrollees. Although Medicare beneficiaries were not made newly eligible for Medicaid as a result of those expansions, some Medicare beneficiaries may have already been eligible but not enrolled in Medicaid. In fact, recent evidence suggests that up to half of Medicare beneficiaries who are eligible for Medicaid do not enroll. The ACA Medicaid expansions might have increased enrollment among Medicare beneficiaries by both reducing administrative barriers for enrollment and increasing program awareness. This ‘welcome mat’ effect, which has been shown to occur in other settings and populations, could have increased federal and state spending by expanding the pool of Medicare beneficiaries receiving Medicaid support (such as premium and cost sharing assistance or additional benefits covered by Medicaid, including vision, dental, and long-term services and supports). It could have also substantially benefitted Medicare beneficiaries who newly enrolled in Medicaid by reducing their financial burden.

Using 2007-2015 administrative Medicare data on Medicaid enrollment status, demographic characteristics, and health status, we estimate difference-in-difference models that compare the likelihood of enrolling in Medicaid among Medicare beneficiaries in states that expanded Medicaid versus states that did not. Preliminary results show that the probability that Medicare beneficiaries became dually enrolled in both Medicare and Medicaid increased by roughly 15 percent after a state expanded its Medicaid program. Effects were stronger among the disabled than the elderly, perhaps because those populations were more likely to be affected by ACA outreach.

Results also suggest that the expansions had a greater impact among beneficiaries with lower service needs and weaker incentives to enroll in Medicaid. Specifically, expansions only affected the non-institutionalized Medicare population. They disproportionately affected younger enrollees in the elderly population and beneficiaries with lower fee-for-service Medicare spending in the disabled population. Overall, our results suggest that the ACA expansions reached more people than their target populations, with implications for federal and state budgets and for beneficiaries’ out-of-pocket costs.