The Impact of the ACA Medicaid Expansion on Disability Program Participation

In addition to providing cash payments, the disability benefit programs Supplemental Security Income (SSI) and Social Security Disability Income (SSDI) offer health insurance to recipients, increasing the value of participating in those programs. However, individuals with disabilities typically must leave their jobs to apply for disability benefits, and may therefore be without health insurance during the disability application process. The Affordable Care Act (ACA) expanded the availability of Medicaid for individuals with family incomes somewhat higher than the means-tested income limits for SSI, changing the relative benefit of participating in disability programs as well as the cost of exiting the labor market to apply for disability program benefits. In this paper, we explore the impact of expanded access to Medicaid through the ACA on participation in disability benefit programs, using the fact that the Supreme Court decision of June 2012 made the Medicaid expansion optional for the states. We improve on existing state differences-in-differences literature by comparing changes in county-level SSI and SSDI caseloads in contiguous county pairs that cross state lines. This approach allows us to focus narrowly on differences arising from the ACA Medicaid expansion choice by comparing changes over time in outcomes from U.S. counties on either side of a state border in cases where one state expanded Medicaid and the other did not. We document that contiguous counties are more similar in pre-existing characteristics and trends than a general sample of U.S. states. We find robust evidence of increases in insurance coverage due to the Medicaid expansion using our county border discontinuity identification strategy, of magnitudes similar to those found in previous work. This suggests that Medicaid expansions do result in differing levels of coverage relative to contiguous counties across state lines. We use publicly available county-level data from the Social Security Administration on SSI and SSDI caseloads, as well as data on applications and awards at the county level from internal SSA files. Our results for disability program participation suggest any effects are small and are limited to effects on SSI. We find no statistically significant impacts on SSDI caseloads when looking within contiguous county pairs.