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UNITED STATES DEPARTMENT OF LABOR

Incentives and disincentives in the U.S. social safety net

Review Guidelines

Causal Evidence Guidelines

Citation

Ilin, E. (2022). Incentives and disincentives in the U.S. social safety net [Doctoral dissertation, Boston University]. [Individuals in households with employer health insurance and incomes between 138 and 150 percent of the federal poverty line]

Highlights

  • The study's objective was to examine the impact of the Affordable Care Act’s (ACA) Medicaid expansion on employment and earnings for individuals in households with employer health insurance and incomes between 138 and 150 percent of the federal poverty line (FPL) prior to the ACA Medicaid expansion. The author investigated similar research questions for individuals in uninsured households with incomes below 100% of the FPL prior to the ACA Medicaid expansion and for individuals in households with at least one household member already on Medicaid prior to the ACA Medicaid expansion, the profiles of which can be found here:
  • The author used a difference-in-difference design with individual fixed effects to estimate the impacts of the ACA Medicaid expansion on weekly hours worked and monthly earnings, using panel data from the 2014 Survey of Income and Plan Participation (SIPP). They used a statistical model to compare the outcomes of treatment and comparison group members, before and after the ACA Medicaid expansion.
  • The study found that among individuals in households with employer health insurance and incomes between 138 and 150 percent of the FPL prior to the ACA Medicaid expansion, those in states that expanded Medicaid eligibility experienced significant decreases in weekly hours worked and monthly earnings, compared to those in non-expansion states. 
  • The quality of causal evidence presented in this report is moderate because it was based on a well-implemented non-experimental design. This means we are somewhat confident that the estimated effects are attributable to the ACA Medicaid expansion, but other factors might also have contributed.

Intervention Examined

Affordable Care Act (ACA)

Features of the Intervention

The ACA became law in 2010 and was the largest expansion of public health insurance since the enactment of Medicaid and Medicare in the 1960s. The ACA aimed to expand health insurance coverage and cover more uninsured individuals through three main provisions. First, the ACA expanded Medicaid benefits to adults with incomes of 138 percent of the FPL. Second, the ACA created the Health Insurance Marketplace, which is a website for people to purchase affordable private insurance coverage. Third, the ACA introduced subsidies to reduce health insurance premiums purchased through the Health Insurance Marketplace for households with incomes between 100 percent and 400 percent of the FPL. ACA Medicaid expansion began in January 2014, with the federal government covering most of the costs associated with expanded eligibility. However, the Supreme Court’s ruling in National Federation of Independent Business v. Sebelius allowed states to opt out of expanding Medicaid eligibility.

Features of the Study

The study used a difference-in-difference design with individual fixed effects to examine the impact of the ACA Medicaid expansion on employment and earnings. The author used panel data from the 2014 SIPP which includes information on individuals' income and public health insurance participation from 2013 to 2016.  The treatment group included individuals in states that expanded Medicaid eligibility, and the comparison group included individuals in non-expansion states. The author used a statistical model to compare the outcomes of treatment and comparison group members, before and after the ACA Medicaid expansion. The model included individual fixed effects, state fixed effects, and year-month fixed effects with standard errors clustered at the state level.

Findings

Employment

  • For individuals in households with employer health insurance and incomes between 138 and 150 percent of the FPL, the study did not find a statistically significant relationship between the ACA Medicaid expansion and total weekly hours worked. 
  • For individuals in households with employer health insurance and incomes between 138 and 150 percent of the FPL, the study did not find a statistically significant relationship between the ACA Medicaid expansion and weekly hours worked in individuals’ main jobs. 
  • The study found that for individuals in households with employer health insurance and incomes between 138 and 150 percent of the FPL, those in states that expanded Medicaid eligibility significantly decreased the number of weekly hours worked in a second job by 3.97 hours less than those in non-expansion states, following the start of Medicaid expansion in 2014.  

Earnings and wages

  • The study found that for individuals in households with employer health insurance and incomes between 138 and 150 percent of the FPL, those in states that expanded Medicaid eligibility significantly decreased their total monthly earned income by $528.72 less than those in non-expansion states, following the start of Medicaid expansion in 2014. 
  • The study found that for individuals in households with employer health insurance and incomes between 138 and 150 percent of the FPL, those in states that expanded Medicaid eligibility significantly decreased their monthly earned income from their main job by $275.78 less than those in non-expansion states, following the start of Medicaid expansion in 2014. 
  • The study found that for individuals in households with employer health insurance and incomes between 138 and 150 percent of the FPL, those in states that expanded Medicaid eligibility significantly decreased their monthly earned income from a second job by $252.94 less than those in non-expansion states, following the start of Medicaid expansion in 2014. 

Considerations for Interpreting the Findings

The author conducted separate analyses for three distinct groups of individuals likely to be impacted by Medicaid expansion. This profile summarizes findings for individuals in households with employer health insurance and incomes between 138 and 150 percent of the FPL prior to ACA Medicaid expansion. Findings for individuals in uninsured households with incomes below 100% of the FPL, prior to ACA Medicaid expansion, and findings for individuals in households with at least one household member already on Medicaid prior to ACA Medicaid expansion are summarized in separate study profiles. Together, this study’s three subgroup analyses find mixed effects of the ACA Medicaid expansion on employment and earnings. The study found favorable effects on hours worked and earnings for some subgroups but unfavorable effects for other subgroups. 

Causal Evidence Rating

The quality of causal evidence presented in this report is moderate because it was based on a well-implemented non-experimental design. This means we are somewhat confident that the estimated effects are attributable to the ACA Medicaid expansion, but other factors might also have contributed.