Working Paper: NBER ID: w25488
Authors: Mark Duggan; Atul Gupta; Emilie Jackson
Abstract: The Affordable Care Act (ACA) authorized the largest expansion of public health insurance in the U.S. since the mid-1960s. We exploit ACA-induced changes in the discontinuity in coverage at age 65 using a regression discontinuity based design to examine effects of the expansion on health insurance coverage, hospital use, and patient health. We then link these changes to effects on hospital finances. We show that a substantial share of the federally-funded Medicaid expansion substituted for existing locally-funded safety net programs. Despite this offset, the expansion produced a substantial increase in hospital revenue and profitability, with larger gains for government hospitals. On the benefits side, we do not detect significant improvements in patient health, although the expansion led to substantially greater hospital and emergency room use, and a reallocation of care from public to private and better-quality hospitals.
Keywords: Affordable Care Act; Medicaid Expansion; Hospital Utilization; Health Insurance Coverage; California
JEL Codes: H51; I13; L33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ACA-induced expansion of Medicaid (G52) | increase in any form of health insurance for individuals aged 21 to 64 (I13) |
| Medicaid expansion (I18) | substitution for county safety net programs (I38) |
| Medicaid expansion (I18) | shift in financing responsibility from local taxpayers to federal taxpayers (H77) |
| Medicaid expansion (I18) | increase in total revenue per bed for average government hospital (H51) |
| Medicaid expansion (I18) | increase in total revenue per bed for private hospitals (I10) |
| ACA (G52) | increase in emergency room visits (I19) |
| ACA (G52) | increase in hospital stays (I11) |
| ACA (G52) | no significant improvements in patient health outcomes (measured by in-hospital mortality rates) (I14) |
| Medicaid expansion (I18) | reallocation of care from public to private hospitals (I11) |
| Medicaid expansion (I18) | shift towards better-quality hospitals for patients aged 64 (I18) |