There is no conflict of interest.
Citation
Lee, J. Y., & Winters, J. V. (2020). State Medicaid Expansion and the Self-Employed. IZA Discussion Paper, No. 12997. http://dx.doi.org/10.2139/ssrn.3546394
Highlights
- The study's objective was to examine the impact of state Medicaid expansion under the Affordable Care Act (ACA) on self-employment and receipt of Medicaid health insurance.
- The study used a difference-in-differences design to compare the outcomes of individuals in states that expanded Medicaid to states that did not. The authors used American Community Survey data and statistical models to compare the difference in outcomes between the groups.
- The study found a significant relationship between state Medicaid expansion and increased incorporated self-employment among individuals with incomes below 138% of the federal poverty level (FPL). The study also found a significant relationship between state Medicaid expansion and an increased probability of having Medicaid insurance for both incorporated and unincorporated self-employed individuals.
- This study receives a moderate evidence rating. This means we are somewhat confident that the estimated effects are attributable to state Medicaid expansion under the ACA, but other factors might also have contributed.
Intervention Examined
State Medicaid expansion following the Affordable Care Act
Features of the Intervention
The Affordable Care Act (ACA) was enacted by President Barack Obama on March 23, 2010. This legislation allowed U.S. citizens and permanent residents with incomes below 138% of the Federal Poverty Level (FPL) to qualify for Medicaid. Before the ACA, Medicaid eligibility was primarily restricted to low-income individuals with dependent children or disabilities, leaving many self-employed individuals without affordable health insurance options. Following a U.S. Supreme Court decision in June 2012, states were given the option to decline or postpone the expansion of Medicaid. As a result of the ACA, Medicaid was expanded in 24 states and the District of Columbia on January 1, 2014, with an additional nine states choosing to expand coverage between 2014 and 2018.
Features of the Study
The study used a difference-in-differences design to compare outcomes for individuals in states that expanded Medicaid with those that did not. The study included all U.S. states and the District of Columbia. The sample was restricted to U.S. citizens aged 26 to 64, excluding individuals 25 or younger who might have been covered under their parents' health insurance and those 65 or older who were eligible for Medicare. Individuals residing in states that expanded coverage and met the expansion guidelines received or were potentially eligible to receive Medicaid health insurance. Conversely, individuals in states that did not expand coverage and did not meet the expansion guidelines were not eligible to receive Medicaid health insurance. The data were obtained from the U.S. Census Bureau's American Community Survey (ACS) spanning the years 2009 to 2018. The authors used statistical models to compare self-employment outcomes and Medicaid coverage in states that implemented Medicaid expansion to those that did not.
Findings
Employment
- The study found no significant relationships between state Medicaid expansion and incorporated or unincorporated self-employment for the main sample.
- When examining the impacts by subgroup, the study found no significant relationship between state Medicaid expansion and self-employment for those earning less than 250% of the FPL. However, it found a significant relationship between state Medicaid expansion and increased incorporated self-employment for those earning less than 138% of the FPL.
Public benefits receipt
- The study found a significant relationship between state Medicaid expansion and increased probability of having Medicaid insurance for both incorporated and unincorporated self-employed individuals.
Causal Evidence Rating
The quality of causal evidence presented in this report is moderate because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to state Medicaid expansion under the ACA, but other factors might also have contributed.