The Effect of Health Insurance on Crime: Evidence from Affordable Care Act Medicaid Expansion

During the last year, there has been considerable debate in congress over the future of the Affordable Care Act (ACA), and particularly its Medicaid expansion. In the process, there has been significant focus on its various impacts across the economy. However, little evidence exists on its effects on criminal behavior, a gap in the literature that this paper seeks to address. Using a one period static model of criminal behavior, I argue we should anticipate a decrease in time devoted to criminal activities in response to the expansion, since the availability of Medicaid raises the opportunity cost of crime. This prediction is particularly relevant for the ACA expansion, since it primarily affects childless adults, the population most likely to engage in criminal behavior. I validate this forecast using a difference-in-differences approach, estimating the expansion effects on a panel data set of state- and county-level crime rates. My point estimates show that the ACA Medicaid expansion is negatively related to burglary, motor vehicle theft, criminal homicide, robbery, and aggravated assault. These results are consistent across various robustness checks. A back-of-the-envelope calculation suggests the value of this ACA induced reduction in crime to expansion states is almost $9.7 billion a year. Thus, in addition to its other known benefits, these findings suggest that the ACA Medicaid expansion also improved public safety by reducing crime.