Mind the Gap: The Impact of the ACA Medicaid Expansion on Health Outcomes in the United States

Abstract: The United States is the only OECD country to not provide universal health coverage to its citizens. While majority of the population is able to obtain insurance through employer-sponsored plans, many low-income adults fall victim to the ‘coverage gap’ – earning too much to qualify for state-funded social programs, in jobs that fail to provide a viable alternative. The central aim of the Affordable Care Act (ACA) was to improve the health outcomes of this at-risk group through the expansion of the country’s Medicaid program. In this paper, I assess the impact of this healthcare reform by comparing changes in health outcomes between the states that chose to participate in the expansion and those that declined. Applying a difference-in-difference model to repeated cross-sectional survey data, I examine four different measures of health (access, preventative care, status, and behaviour) over a six-year period from 2010-2015. I find a significant improvement in these outcomes in expansion states relative to non-expansion states when focusing on low-income non-elderly adults, in particular health access and preventative care. These translate into modest improvements in health status, and there is also some evidence of ex ante moral hazard with regards to risky health behaviours.