The Affordable Care Act’s Medicaid Expansion and Unemployment

We examine how a key provision of the Affordable Care Act—the expansion of Medicaid eligibility—affected health insurance coverage and labor market transitions of unemployed workers. Comparing trends in states that implemented the Medicaid expansion to those that did not, we find that the ACA Medicaid expansion substantially increased insurance coverage among unemployed workers. We then test whether this strengthening of the safety net reduced transitions from unemployment to employment. We find no evidence of such an effect.