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THERECENTSLOWDOWNIN

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SummaryandIntroductionTheAffordableCareActhas expandedhighquality, affordablehealth insurance coverage tomillions of Americans. One important way in which the Affordable Care Act is expandingcoverage is by providing generous financial support to States that opt to expand Medicaideligibilitytoallnonelderlyindividualsinfamilieswithincomesbelow133percentoftheFederalPovertyLevel.To date, 26 States and theDistrict of Columbia have seized this opportunity, and since thebeginningof theAffordableCareActs firstopenenrollmentperiod,5.2millionpeoplehavegainedMedicaidorChildrensHealthInsuranceProgram(CHIP)coverageintheseStates,atallythatwillgrowinthemonthsandyearsaheadasMedicaidenrollmentcontinues.Incontrast,24StateshavenotyetexpandedMedicaidincludingmanyoftheStatesthatwouldbenefitmostandsometimesbecauseState legislatureshavedefiedeventheirowngovernorsanddeniedhealth insurance coverage to millions of their citizens. Researchers at the Urban Instituteestimatethat,iftheseStatesdonotchangecourse,5.7millionpeoplewillbedeprivedofhealthinsurancecoverage in2016. Meanwhile,theseStateswillforgobillions inFederaldollarsthatcouldboosttheireconomies.Thisanalysisusesthebestevidencefromtheeconomicsandhealthpolicyliteraturestoquantifyseveral importantconsequencesofStatesdecisionsnot toexpandMedicaid. Thatevidence,whichisbasedprimarilyoncarefulanalysisoftheeffectsofpastpolicydecisions,isnecessarilyan imperfect guide to the future, and the actual effects of Medicaid expansion under theAffordableCareActcouldbelargerorsmallerthantheestimatespresentedbelow.However,this evidence is clear that the consequences of States decisions are farreaching, withimplicationsforthehealthandwellbeingoftheircitizens,theireconomies,andtheeconomyoftheNationasawhole.

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DirectBenefitsofExpandedInsuranceCoveragefortheNewlyInsuredOnedirect consequenceofStatesdecisionsnot toexpandMedicaid is thatmillionsof theiruninsured citizenswill not experience the improved access to health care, greater financialsecurity,andbetterhealthoutcomesthatcomewithinsurancecoverage.

ImprovedaccesstocareHavinghealthinsuranceimprovesaccesstohealthcare.ThisanalysisestimatesthatiftheStatesthathavenotyetexpandedMedicaiddidso:

1.4millionmorepeoplewouldhaveausualsourceofcliniccare.

Havinghealthinsuranceincreasestheprobabilitythatindividualshaveausualsourceofcliniccare, like aprimary carephysiciansoffice. If the24 States thathavenot yetexpandedMedicaiddidso,anadditional1.4millionpeoplewouldhaveausualsourceofcliniccareonceexpanded coveragewas fully ineffect. States thathavealreadyexpandedMedicaidwillachievethisoutcomefor1.0millionpeople.

651,000morepeoplewouldreceiveallcaretheyfeeltheyneedinatypicalyear.

Havinghealthinsuranceincreasestheprobabilitythatindividualsreportreceivingallneededcareovertheprioryear.Ifthe24StatesthathavenotyetexpandedMedicaiddidso,anadditional651,000peoplewouldreceiveallneededcareoveragivenyearonceexpandedcoveragewasfully ineffect. StatesthathavealreadyexpandedMedicaidwillachievethisoutcomefor494,000people.

Hundredsofthousandsmorepeoplewouldreceiverecommendedpreventivecareeachyear.

Havinghealthinsuranceincreasestheprobabilityofreceivingmanytypesofrecommendedandpotentiallylifesavingpreventivecare,including:

Cholesterollevelscreenings:Ifthe24StatesthathavenotyetexpandedMedicaiddidso,

theneachyearanadditional829,000peoplewouldreceivecholesterollevelscreeningsonceexpandedcoveragewasfullyineffect.StatesthathavealreadyexpandedMedicaidwillachievethisoutcomefor630,000people.

Mammograms:Ifthe24StatesthathavenotyetexpandedMedicaiddidso,theneachyear an additional 214,000 women between the ages of 50 and 64 would receivemammogramsonce expanded coveragewas fully in effect. States thathave alreadyexpandedMedicaidwillachievethisoutcomefor161,000womeninthisagegroup.

Papanicolaoutests(papsmears):Ifthe24StatesthathavenotyetexpandedMedicaiddid so, theneachyearanadditional345,000womenwould receivepap smearsonceexpandedcoveragewasfullyineffect.StatesthathavealreadyexpandedMedicaidwillachievethisoutcomefor261,000women.

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Millionsofpeoplewouldbebetterabletoobtainotherneededmedicalcare.Havinghealthinsurancealsoincreasesreceiptofothertypesofmedicalcare.Forexample,ifthe24StatesthathavenotyetexpandedMedicaiddidso,theywouldenableanadditional15.4millionphysicianoffice visitseach yearonceexpanded coveragewas fully ineffect.StatesthathavealreadyexpandedMedicaidwillenableanadditional11.7millionphysicianofficevisitseachyear.

GreaterfinancialsecurityHavinghealthinsuranceprovidesprotectionfromfinancialhardshipinthefaceofsickness.ThisanalysisestimatesthatiftheStatesthathavenotyetexpandedMedicaiddidso:

255,000fewerpeoplewillfacecatastrophicoutofpocketmedicalcostsinatypicalyear.

Highqualityhealth insurance coveragedramatically reduces the risk that individuals facecatastrophicoutofpocketmedicalcosts(definedascostsinexcessof30percentofincome).Ifthe24StatesthathavenotyetexpandedMedicaiddidso,255,000fewerpeoplewouldfacecatastrophicmedicalcostseachyearonceexpandedcoveragewasfullyineffect.StatesthathavealreadyexpandedMedicaidwilleliminatecatastrophicmedicalcostsfor194,000peopleeachyear.

810,000fewerpeoplewillhavetroublepayingotherbillsduetotheburdenofmedicalcosts.

Havinghealthinsurancereducesindividualsriskofhavingtoborrowmoneytopaybillsorskip apaymententirely inorder topaymedicalbills. If the24 states thathavenot yetexpandedMedicaiddidso,810,000fewerpeoplewouldreportthistypeoffinancialstrainoverthecourseofayearonceexpandedcoveragewasfullyineffect.StatesthathavealreadyexpandedMedicaidwillachievethisoutcomefor614,000peopleeachyear.

BettermentalhealthHavinginsuranceimprovesmentalhealth.Thisanalysisestimatesthatifthe24StatesthathavenotyetexpandedMedicaiddidso,therewouldbe458,000fewerpeopleexperiencingdepressiononceexpandedcoveragewasfully ineffect. StatesthathavealreadyexpandedMedicaidwillreducethenumberofpeopleexperiencingdepressionby348,000.

BetteroverallhealthHavinginsurancecoverageimprovesoverallhealth.Thisanalysisestimatesthatifthe24StatesthathavenotyetexpandedMedicaiddidso,757,000additionalpeoplewouldreportbeing inexcellent,verygood,orgoodhealthonceexpandedcoveragewasfullyineffect.StatesthathavealreadyexpandedMedicaidwillachievethisoutcomefor575,000people.

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BenefitsofExpandingMedicaidforStateEconomiesHealthierworkerswhoare less financiallystressedand inbettermentalhealthmaybemorelikelytoparticipateintheworkforceorhavehigherproductivityonthejob,economicbenefitsthatcouldbeimportantoverthelongrun.Moreimmediately,StatesthatfailtoexpandMedicaidare also passing up billions of Federal dollars that could boost their economies today. Byincreasinglowincomeindividualsabilitytoaccesscare,relievingcashstrappedfamiliesofhighoutofpocket costs,and reducinguncompensated care, theexpansion in insurance coverageenabledbythoseFederaldollarswouldboostdemandformedicalandnonmedicalgoodsandservices. Overthenext fewyears,whiletherecovery fromthe20072009recessionremainsincomplete and slack remains in the economy, this increase indemandwouldboost overallemploymentandeconomicactivity.ThisanalysisestimatesthatexpandingMedicaidwouldgeneratethefollowingbenefitsforStateseconomiestoday:

AdditionalFederalfundsByexpandingMedicaid,StatescanpullbillionsinadditionalFederalfundingintotheireconomieseveryyear,withnoStatecontributionoverthenextthreeyearsandonlyamodestonethereafterforcoveragefornewlyeligiblepeople.Ifthe24StatesthathavenotyetexpandedMedicaidhaddonesoasofJanuary1,thoseStatesandtheircitizenswouldhavereceivedanadditional$88billion in Federal support through calendar year 2016. States that have already expandedMedicaidwillreceive$84billionoverthatperiod.

MorejobsBypumpingmoreFederaldollars into theireconomies,Statesdecisions toexpandMedicaidcreatejobs.Ifthe24StatesthathavenotyetexpandedMedicaidhaddonesoasofJanuary1,theywouldhaveboostedemploymentby85,000jobsin2014,184,000jobsin2015,andatotalof 379,000 jobyears through 2017. States thathave already expandedMedicaidwillboostemploymentby79,000 jobs in2014,172,000 jobs in2015,anda totalof356,000 jobyearsthrough2017.

GreateroveralleconomicactivityBypumpingmoreFederaldollars into theireconomies,Statesdecisions toexpandMedicaidincrease theoverall levelofeconomicactivity. If the24 States thathavenot yetexpandedMedicaidhaddonesoasofJanuary1,theywouldhavecreatedanadditional$66billionintotaleconomicactivitythrough2017. StatesthathavealreadyexpandedMedicaidwillcreate$62billionintotaleconomicactivitythrough2017. TheremainderofthisreportprovidesmoredetailonStatesoptiontoexpandMedicaidundertheAffordableCareAct,discussestheeffectsofStateschoicesfortheiruninsuredcitizensandtheireconomies,presentsthemethodologyusedtoquantifythoseeffects,andprovidestablesandfigureswithStatebyStatedetail.

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I. Background on States Option to Expand Medicaid Under theAffordableCareAct

Medicaid isaprogram jointlyfundedbytheFederalgovernmentandtheStatesthatprovideshealthinsurancetoeligiblelowincomepeople.EachStateoperatesitsownMedicaidprogramandhasconsiderableflexibilityindeterminingeligibilitycriteria.TheAffordableCareAct(ACA)gives States the option to expand their Medicaid programs to all nonelderly individuals infamilieswith incomesbelow133percentof the FederalPoverty Level (FPL). Program rulesprovide for an additional five percent income disregard, bringing the effective eligibilitythresholdto138percentofFPL:$16,105forasingleadultor$32,913forafamilyoffourin2014.Because children at these income levels are generally already eligible for Medicaid or theChildrensHealthInsuranceProgram,thisexpansionprimarilyaffectslowincomeadults.PriortotheAffordableCareActsMedicaidexpansion,themedianeligibilitylevelforworkingparentswasonly61percentoftheFPL,and, innearlyallStates,nondisabledadultswithoutchildrenwerenoteligibleatall(Heberleinetal.2013).AsdepictedinFigure1,asofJuly2,2014,26Statesand the District of Columbia had taken advantage of this option to expand their Medicaidprograms.

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TheFederalgovernmentwillcoverthevastmajorityofthecostsofexpandingMedicaideligibilityundertheAffordableCareAct.Through2016,theFederalgovernmentwillpay100percentofthe costs of covering newly eligible individuals, falling gradually to 90 percent in 2020 andsubsequentyears.ThisisaconsiderablylargerFederalcontributionthanforeligibilitycategoriesinexistencebeforetheAffordableCareAct,forwhichprogramcostsaresharedbetweentheFederalgovernmentandtheStatesaccordingtoaformulathattargetsadditionalassistancetolowerincomeStates,withtheFederalshareaveragingaround57percentandrangingfrom50percenttojustunder74percentinfiscalyear2014.1StateselectingtoexpandtheirMedicaidprogramsarelikelytorealizelargesavingsinotherareasoftheirbudgetsthatoffseteventhemodest increase inStateMedicaidspendingafter2016.Researchers at the Urban Institute have estimated that, if all States expanded Medicaid,reductions inuncompensatedcarecurrentlyfinancedbyStategovernmentswouldmorethanoffsetanyadditionalMedicaidcosts,generating$10billioninsavingsovertenyearsforallStates,althoughthenetimpactwillvarybyState(Holahan,Buettgens,andDorn2013).ThatanalysisalsoomitsotherpotentialStatesavings, includingreducedcoststoStatesofprovidingmentalhealthservicesthatwouldnowbecoveredbyMedicaid.Relatedresearchbysomeofthesesameauthorshasconcludedthattheseothersavingsmaybesubstantial(Buettgensetal.2011). MedicaidisanimportantcomponentoftheAffordableCareActsoverallapproachtoexpandinghealthinsurancecoverage.Individualswithincomesunder100percentoftheFPLarenoteligiblefortaxcreditsandcostsharingassistancethroughtheHealthInsuranceMarketplacesand,asaconsequence,willgenerallynothaveaccesstoaffordablehealthinsurancecoverageiftheirStatedoesnotexpandMedicaid. Furthermore,Medicaid typicallyoffers loweroutofpocketcoststhanMarketplacecoverage,soexpandingMedicaidwilllowerthecostofcoverageforindividualsinfamilieswithincomesabove100percentandbelow138percentoftheFPL.

1Children(and,insomeStates,pregnantwomen)areeligibleforpublicinsurancecoveragethrougharelatedprogram,theChildrensHealthInsuranceProgram.UnderthematchingformulausedforCHIP,theFederalgovernmentpaysahighershareofthecosts,averagingabout70percentandrangingacrossStatesbetween65to81percentinfiscalyear2014.

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II. Methodology for Estimating the Effects of States Decisions toExpandMedicaid

ToestimatetheconsequencesofStatedecisionstoexpandMedicaid,thisanalysisproceedsintwosteps.First,CEAobtainedestimatesofStatesMedicaidexpansiondecisionsoninsurancecoverageandtheamountofFederalfundingenteringStateeconomies;theseestimateswereeither taken directly from or derived from publications by the Urban Institute and theCongressionalBudgetOffice.Second,CEAusedresearchontheeffectsofpastpolicydecisionstotranslatethosedirecteffectsintoimpactsontheultimateoutcomesofinterest:accesstocare,financialsecurity,healthandwellbeing,andtheNationseconomicperformance.Theavailableresearch literatureunambiguouslydemonstrates thatStatedecisions toexpandMedicaidwillhavelargeeffectsinalloftheseareas,effectsthatarereflectedintheestimatesreportedinthisanalysis.Nevertheless,itisimportanttokeepinmindthat,whileallofthestudiesthisreportdrawsuponarerigorous,allresearchhaslimitations.Statisticalanalysesaresubjectto samplingerrors,aswellasother imperfections thatcancauseestimates to systematicallyoverstateorunderstatetheeffectsofthepolicychangesstudied.Inaddition,theeffectsofpastpolicy changes may not be a perfect guide to the effects of future policy changes. As aconsequence, while the estimates presented in this analysis represent the best availableestimatesoftheeffectsofexpandingMedicaid,theactualeffectscouldturnouttobelargerorsmallerthantheestimatespresentedinthisreport.TheremainderofthissectiondescribesCEAsmethodologyingreaterdetail.

EffectsonInsuranceCoverageThemostdirectconsequenceofStatedecisions toexpandMedicaid is to increase insurancecoverageinthatState.BecausetheotherbenefitsofexpandingMedicaidflowfromthisbasiceffect,estimatesofhowexpandingMedicaidaffectsinsurancecoverageareacrucialinputintotherestoftheanalysesundertakeninthisreport.Inthisreport,CEAreliesuponpublishedresultsfrom theUrban InstitutesHealth InsurancePolicySimulationModel (HIPSM),whichprovideStatebyStateestimatesofhoweachStatesdecisionaboutwhethertoexpandMedicaidwouldaffectinsurancecoverageinthatState(Holahanetal.2012;Holahan,Buettgens,andDorn2013).TheHIPSMnationalestimatesofhowtheAffordableCareActwillaffectinsurancecoveragearebroadlysimilartothoseproducedbyotheranalysts,includingtheCongressionalBudgetOffice(CBO2012a)andtheRANDCorporation(Eibneretal.2010).

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PeoplewithInsuranceCoveragein2016

NotYetExpandingMedicaid 5,692,000Alabama 235,000Alaska 26,000Florida 848,000Georgia 478,000Idaho 55,000Indiana 262,000Kansas 100,000Louisiana 265,000Maine 28,000Mississippi 165,000Missouri 253,000Montana 38,000Nebraska 48,000NorthCarolina 377,000Oklahoma 123,000Pennsylvania 305,000SouthCarolina 198,000SouthDakota 26,000Tennessee 234,000Texas 1,208,000Utah 74,000Virginia 210,000Wisconsin 120,000Wyoming 16,000

ExpandingMedicaid 4,321,000Arizona 51,000Arkansas 143,000California 1,390,000Colorado 154,000Connecticut 84,000Delaware 7,000DistrictofColumbia 19,000Hawaii 39,000Illinois 398,000Iowa 20,000Kentucky 177,000Maryland 135,000Massachusetts 2,000Michigan 212,000Minnesota 42,000Nevada 105,000NewHampshire 26,000NewJersey 227,000NewMexico 96,000NewYork 167,000NorthDakota 21,000Ohio 446,000Oregon 186,000RhodeIsland 26,000Vermont 4,000Washington 64,000WestVirginia 80,000

Table1.IncreaseinNumberofPeoplewithInsuranceCoverageifStateExpandsMedicaid

Source:UrbanInstitute.

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TheHIPSMestimatesshowthat, ifallStatesexpandedMedicaid,thenumberofpeople intheUnited States with insurance coverage would increase by 10 million by 2016, reflecting anincreaseof4.3millioninthe26StatesandtheDistrictofColumbiathathavealreadyexpandedtheprogramandanincreaseof5.7millioninthe24Statesthathaveyetdotoso.2ThisreportfocusesontheHIPSMestimatesfor2016becausetheseshouldprovideareasonableguideofthe longruneffectsofMedicaidexpansionon insurancecoverage,afterthe initialrampup.Consistentwith that, thisanalysis refers to theseHIPSMestimates for2016as reflecting theeffects of expanded Medicaid coverage when fully in effect. The detailed StatebyStateestimatesarereportedinTable1.ActualexperiencesincethebeginningoftheAffordableCareActsfirstopenenrollmentperiodhasborneoutmodelbasedpredictionsthatStatesdecisionsaboutwhethertoexpandMedicaidwill have significant implications for insurance coverage. In the States (and the District ofColumbia)thathaveexpandedMedicaid,thenumberofpeoplewithhealthinsurancecoveragethroughMedicaid(orCHIP)hasincreasedby5.2million(15.3percent)fromthethirdquarterof2013throughApril2014(CMS2014).3Bycontrast,MedicaidenrollmentinStatesthathavenotyetexpandedMedicaidhas risenby0.8million (3.3percent)over thatperiod. (Themodestincrease in Medicaid enrollment in states that have not yet expanded Medicaid is likelyattributable tosimplifications inMedicaideligibility rules requiredofallStatesandoutreach,publicawareness,andnewenrollmentoptionsassociatedwiththeopeningoftheMarketplaces.)Similarly,surveyshaveshownmuch larger increases in insurancecoverage inStatesthathaveexpandedMedicaidrelativetostatesthathavenot.Comparingthethirdquarterof2013withearlyMarch2014,theUrbanInstitutesHealthReformMonitoringSurveyfounda4.0percentagepointincreaseinthepercentageofnonelderlyadultswithinsurancecoverageinStatesthathadexpandedtheprogram,comparedtoa1.5percentagepointincreaseinStatesthathadnotdoneso(Longetal.2014).Similarly,asurveybyGalluphasfoundthatStatesthatexpandedMedicaidandoperated theirownMarketplaces (aloneor inpartnershipwith theFederalgovernment)experienceda2.5percentagepointincreaseintheshareofadultswithinsurancecoveragefrom2013throughthefirstquarterof2014,comparedwitha0.8percentagepointincreaseinStatesthathavenottakentheseactions(Witters2014).

2HIPSMfindsthatifallStatesexpandedMedicaid,theincreaseinMedicaidenrollmentwouldbe13million,somewhatlargerthanthe10millionincreaseinthenumberofpeoplewithhealthinsurancecoverage.TheincreaseinMedicaidenrollmentislargerthantheincreaseininsurancecoverageprimarilybecausesomeindividualswithincomesbetween100percentofFPLand138percentofFPLwouldswitchfromreceivingsubsidizedcoveragethroughtheMarketplacestoreceivingcoveragethroughMedicaid.Thedifferencebetweenthetwoestimatesmayalsoreflectsomeoffsettingreductioninemployercoverage.3Connecticut,Maine,andNorthDakotahavenotreportedsuitableenrollmentdatatoCMSandarethereforenotincludedinthesetotals.Fordetails,seeCMSApril2014Medicaidenrollmentreport(CMS2014).

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EffectsonAccesstoandUseofMedicalCarePerhaps themostobviouspurposeof theMedicaidprogram is toensure thatenrolleeshaveaccesstoandreceiveneededmedicalcare.Toquantifytheimprovementinaccesstomedicalcare that will results from States decisions to expand Medicaid, this analysis relies uponestimatesfromtheOregonHealthInsuranceExperiment(Finkelsteinetal.2012;Baickeretal.2013a;Baickeretal.2013b;Taubmanetal.2014). TheOregonHealth InsuranceExperiment(OHIE)arosefromtheStateofOregonsdecisioninearly2008toreopenenrollmentunderanearlierMedicaidexpansionthathadextendedcoveragetouninsuredadultswithincomesunder100percentoftheFPL.BecausetheStatecouldnotaccommodateallinterestedapplicants,itallocatedtheopportunitytoenrollinMedicaidbylottery.TheStateofOregonsdecisiontoallocateMedicaidcoveragebylotterycreatedauniqueresearchopportunity.Bycomparingindividualswhowonthelotterytoindividualswholostthelottery,itispossibleto isolatethecausaleffectofhavingornothavingMedicaidcoverage,withouttheconcernthatthecomparisonisconfoundedbyunobserveddifferencesbetweenthosewhodoanddonothaveMedicaidcoverage.Randomizedresearchdesignsofthiskindareconsideredthegoldstandardinsocialscienceresearch,andtheOHIEisuniqueinusingsuchadesigntostudytheeffectsofhavinghealthinsurance.AnadditionalimportantadvantageoftheOHIEforthecurrentanalysisisthatthepopulationthatgainedcoverageintheMedicaidexpansionstudiedintheOHIElowincome,uninsuredadultsisquitesimilartothegroupthatwillgainhealthinsurancecoverageifStatesexpandMedicaidundertheAffordableCareAct.ThisincreasestheconfidencethattheresultsoftheOHIEcanbeextrapolatedtotheAffordableCareActsMedicaidexpansion.Ofcourse,asnotedattheoutset,nostudybasedonpastpolicychangesinaspecificenvironmentappliesperfectly toa futurepolicy change inadifferentenvironment. Oregonshealth caresystemdiffersfromotherStateshealthcaresystemsinsomeways,includingtheavailabilityofmedicalproviders(HuangandFinegold2013),andotherStateslowincomepopulationsdonotlookprecisely likeOregons. Inaddition, theOHIEcanonlyspeak toresultsovera followupperiodofapproximatelytwoyears,buttheeffectsofinsurancecoveragecoulddifferoverlongerperiods.Finally,theeffectsoflargerscalecoverageexpansionscoulddifferfromtheeffectsofthesmallerscaleexpansionexaminedintheOHIE.Nevertheless,theOHIEclearlyprovidesthebestavailableestimates forquantifyingmanypotentialeffectsofStatesdecisions toexpandMedicaidundertheAffordableCareAct. TheOHIEfoundthatMedicaidcoveragesignificantlyimprovesenrolleesaccesstomedicalcare.Specifically,basedon inperson interviews two years after the coverage lottery, the authorsestimatethatthoseenrolledinMedicaidweremorelikelyto: Receiveallneededcare.

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Medicaidcoverage increasedtheprobabilitythat individualsreportedreceivingallneededmedicalcareovertheprior12monthsby11.4percentagepoints,relativetoabaselinerateof61.0percentinthecontrolgroup.4

Haveausualsourceofcliniccare.Medicaidcoverageincreasedtheprobabilitythatindividualsreportedhavingausualsourceofcliniccare(e.g.aprimarycarephysician)by23.8percentagepoints,relativetoabaselineprobabilityof46.1percentinthecontrolgroup.5

Receiverecommendedpreventivecare.

Medicaid coverage dramatically increased receipt of several important types ofrecommendedpreventive care thathavebeen clinicallydemonstrated to improvehealthoutcomes:

Cholesterollevel screenings: Medicaid coverage increased the probability that an

individualreceivedacholesterollevelscreeninginthelast12monthsby14.6percentagepoints,relativetoabaselineprobabilityof27.2inthecontrolgroup.

Mammograms:Medicaidcoverageincreasedtheprobabilitythatwomenagesand50and

olderreceivedamammograminthelast12monthsby29.7percentagepoints,relativetoabaselineprobabilityof28.9percentinthecontrolgroup.

Papanicolaoutests(papsmears):Medicaidcoverage increasedtheprobabilitythatawomanhadreceivedapapsmearinthelast12monthsby14.4percentagepoints,relativetoabaselineprobabilityof44.9percentinthecontrolgroup.6

4Manyindividualsinthecontrolgroupreportedreceivingallneededcarebecausenocarewasnecessaryorbecausetheywereabletoaccesscarethroughothersources(including,forindividualswhoultimatelyqualifiedforMedicaidthroughothereligibilitypathways,Medicaiditself).Similarly,individualswithMedicaidcoveragemayreportnotreceivingallneededcareforavarietyofreasons,includingschedulingortransportationdifficultiesorchallengesinidentifyingasuitableprovider.5InotherworkbasedontheOHIE,theauthorsfindthatMedicaidincreasesemergencyroomutilization(Taubmanetal.2014).Thisfindingisnotinconsistentwiththeincreaseintheprobabilitythatindividualshadausualsourceofcliniccare;Medicaidmaysimultaneouslyincreaseaccesstoprimarycareandmakeindividualsmorewillingtomakeuseofemergencyroomsbyprotectingthemfromthehighoutofpocketcoststhatcancomewithsuchavisit.Inaddition,thefindingthatMedicaidincreasesemergencyroomutilizationcouldchangewhenlookingoverlongertimeperiods(asenrolleesbuildstrongerrelationshipswiththeirprimarycarephysicians)orasaresultofeffortstoreformthehealthcaredeliverysystem,includingeffortssetinmotionbytheAffordableCareAct.6ApproximatelyhalfofStatesMedicaidprogramshaveundertakenfamilyplanningexpansionsunderwhichtheyofferMedicaidcoverageforfamilyplanningandrelatedservices,includingpapsmears,tosomeindividualswhoarenoteligibleforfullMedicaidbenefits(GuttmacherInstitute2014).InalmostallsuchStates,womenwhowouldgaineligibilityforfullMedicaidbenefitsiftheirStateexpandsMedicaidundertheAffordableCareActcouldalreadyhaveobtainedcoverageforpapsmearsviatheStatesfamilyplanningexpansion. OregonhadafamilyplanningexpansioninplaceduringtheOHIEunderwhicheligibilityextendedupto185percentoftheFPL(Sonfield,Alrich,andBensonGold2008);theStatehassinceextendedeligibilitythrough250

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Receiveothertypesofmedicalcare.Medicaid coverage also increased receiptof other categoriesofmedical care. Medicaidcoveragemadepossibleanadditional2.7officevisitsoverthecourseofayear,relativeto5.5 visits in the control group. Similarly,Medicaid increased thenumberofprescriptionmedications an individual was currently taking by 0.7 prescriptions, relative to 1.8prescriptionsinthecontrolgroup.

WhiletheOHIE isuniquelywellsuitedtothecurrentanalysis in lightof itsrandomizeddesignandfocusonapopulationthatisverysimilartothepopulationthatwillgaincoverageifmorestateselect toexpandMedicaid, the finding thathavinghealth insuranceormore generoushealthinsuranceincreasesaccesstohealthcareserviceshasbeenconvincinglydemonstratedinmanyhealthcaresettings.Highqualitystudiesarrivingatsimilarconclusionsincludethewellknown RAND Health Insurance Experiment (Newhouse 1993), studies of past Medicaidexpansions(e.g.CurrieandGruber1996;Sommers,Baicker,andEpstein2012),studiesoftheeffectofgainingMedicareeligibilityatage65(e.g.McWilliamsetal.2007;Cardetal.2009),andaprominentstudyofMassachusettshealthreform(Sommers,Long,andBaicker2014).To translate theOHIEestimates into thenumberofadditional individualsestimated tohavespecifiedtypeofhealthcareexperienceineachState,therelevantpointestimatesweresimplymultipliedbytheHIPSMestimatesofthenumberofindividualswhowouldgaincoverageinthatStateiftheStateexpandsMedicaidcoverage.7Severalofthepreventivecareestimatesapplyonlytoparticularageandgendersubgroups;CEAestimatedtheshareofnewMedicaidenrolleeswhofallintherelevantsubgroupsusingtheAmericanCommunitySurveyandthemethodologydescribedinAppendixAandthenscaleddowntheHIPSMestimatesaccordingly.

TheresultingStatebyStateestimatesoftheincreaseinreceiptofmedicalcarearereportedinTable2 (preventive care)andTable3 (otherutilizationmeasures). Figure2 summarizes theincreasesinutilizationofpreventivecarethatStatesthathavenotyetexpandedMedicaidcouldachieveonceexpandedcoverageisfullyineffect,aswellasthegainsaccruingtoStatesthathavealreadyexpandedtheprogram.Figure3mapstheStatelevelestimatesoftheincreaseintheannualnumberofcholesterollevelscreeningsifeachStateexpandsMedicaid.

percentoftheFPL(GuttmacherInstitute2014).TheOHIEneverthelessfoundthatgainingfullMedicaidcoverageincreasedpapsmearutilization,perhapsbecauseaccessingsuchcareiseasierinthecontextofcoverageforacomprehensivesetofhealthcareservices.ThissuggeststhatexpandingeligibilityforfullMedicaidbenefitswillincreasepapsmearutilizationeveninStateswithafamilyplanningexpansioninplace.ExpandingeligibilityforfullMedicaidbenefitsmightbeexpectedtohavealargereffectinStateswithoutafamilyplanningexpansion,inwhichcasetheestimatesinthisreportwillunderstatetheincreasesinthoseStates.Similarly,Stateandlocalhealthdepartmentsprovidecertainscreeningservicesfundedthroughfederalgrantprogramsorothersources.Aswithfamilyplanningexpansions,theexistenceofsuchprogramsshouldnotaffecttheconclusionthatexpandingeligibilityforMedicaidwouldincreaseutilizationoftheseservices.7TheresultspresentedbytheOHIEreflecttheeffectofeverbeingonMedicaidduringthestudyperiod,sonotallindividualswereenrolledinMedicaidforthefullperiodoverwhichthechangeinutilizationwasmeasured.TheeffectofcontinuousMedicaidenrollmentontheoutcomesexaminedinthisreportwouldlikelybelarger,sotheseestimatesaresomewhatconservative.

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0

200,000

400,000

600,000

800,000

1,000,000

Mammograms PapanicolaouTests CholesterolLevelScreenings

StatesExpandingMedicaidStatesNotYetExpandingMedicaid

Increaseinannualnumberofindividualsreceivingspecified typeofcare

Figure2:ProjectedIncreaseinUtilizationofPreventiveCareifStates ExpandMedicaid, byCurrentExpansionStatus

Sources:Urban Institute;Baickeretal.(2013);CEAcalculations.Note:Estimatesreflecteffectswhenexpandedcoverageisfullyineffect.Seetextformethodologicaldetails.Increasesinreceiptofmammogramsreflectonlywomen50andolder.

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CholesterolLevelScreeninginPast12Months

MammograminPast12Months

PapanicolaouSmearinPast12Months

NotYetExpandingMedicaid 829,300 214,100 344,900Alabama 34,200 9,300 14,200Alaska 3,800 900 1,500Florida 123,600 35,300 52,200Georgia 69,600 17,000 28,900Idaho 8,000 2,300 3,300Indiana 38,200 9,000 15,200Kansas 14,600 3,100 5,800Louisiana 38,600 10,400 16,000Maine 4,100 1,300 1,700Mississippi 24,000 6,200 9,700Missouri 36,900 9,400 14,900Montana 5,500 1,600 2,400Nebraska 7,000 1,600 2,900NorthCarolina 54,900 13,900 23,000Oklahoma 17,900 4,800 7,300Pennsylvania 44,400 11,100 17,600SouthCarolina 28,800 8,000 12,000SouthDakota 3,800 900 1,500Tennessee 34,100 9,500 14,000Texas 176,000 44,100 75,200Utah 10,800 1,900 4,500Virginia 30,600 8,000 13,000Wisconsin 17,500 3,800 6,700Wyoming 2,300 700 1,100

ExpandingMedicaid 629,600 160,600 261,300Arizona 7,400 2,600 3,200Arkansas 20,800 5,600 8,500California 202,500 49,300 86,800Colorado 22,400 5,200 9,000Connecticut 12,200 3,100 5,100Delaware 1,000 300 500DistrictofColumbia 2,800 400 1,200Hawaii 5,700 1,600 2,300Illinois 58,000 14,700 23,800Iowa 2,900 600 1,200Kentucky 25,800 6,600 10,300Maryland 19,700 4,600 8,100Massachusetts 300 100 100Michigan 30,900 7,000 12,000Minnesota 6,100 1,300 2,500Nevada 15,300 4,300 6,500NewHampshire 3,800 1,100 1,600NewJersey 33,100 8,600 14,000NewMexico 14,000 3,700 5,500NewYork 24,300 8,400 10,300NorthDakota 3,100 700 1,300Ohio 65,000 17,400 26,000Oregon 27,100 7,100 11,300RhodeIsland 3,800 900 1,600Vermont 600

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AdditionalPeoplewitha Usual

SourceofClinicCare

AdditionalPeopleReceivingAll

NeededCareinPast12Months

NumberofAdditional

PhysicianVisitsEachYear

ReductioninNumberofPeople

ExperiencingDepression

AdditionalPeopleReportingGood,VeryGood,or

ExcellentHealth

NotYetExpandingMedicaid 1,352,000 651,000 15,368,000 458,000 757,000Alabama 56,000 27,000 635,000 19,000 31,000Alaska 6,000 3,000 70,000 2,000 3,000Florida 201,000 97,000 2,290,000 68,000 113,000Georgia 114,000 55,000 1,291,000 38,000 64,000Idaho 13,000 6,000 149,000 4,000 7,000Indiana 62,000 30,000 707,000 21,000 35,000Kansas 24,000 11,000 270,000 8,000 13,000Louisiana 63,000 30,000 716,000 21,000 35,000Maine 7,000 3,000 76,000 2,000 4,000Mississippi 39,000 19,000 446,000 13,000 22,000Missouri 60,000 29,000 683,000 20,000 34,000Montana 9,000 4,000 103,000 3,000 5,000Nebraska 11,000 5,000 130,000 4,000 6,000NorthCarolina 90,000 43,000 1,018,000 30,000 50,000Oklahoma 29,000 14,000 332,000 10,000 16,000Pennsylvania 72,000 35,000 824,000 25,000 41,000SouthCarolina 47,000 23,000 535,000 16,000 26,000SouthDakota 6,000 3,000 70,000 2,000 3,000Tennessee 56,000 27,000 632,000 19,000 31,000Texas 287,000 138,000 3,262,000 97,000 161,000Utah 18,000 8,000 200,000 6,000 10,000Virginia 50,000 24,000 567,000 17,000 28,000Wisconsin 29,000 14,000 324,000 10,000 16,000Wyoming 4,000 2,000 43,000 1,000 2,000

ExpandingMedicaid 1,026,000 494,000 11,667,000 348,000 575,000Arizona 12,000 6,000 138,000 4,000 7,000Arkansas 34,000 16,000 386,000 12,000 19,000California 330,000 159,000 3,753,000 112,000 185,000Colorado 37,000 18,000 416,000 12,000 20,000Connecticut 20,000 10,000 227,000 7,000 11,000Delaware 2,000 1,000 19,000 1,000 1,000DistrictofColumbia 5,000 2,000 51,000 2,000 3,000Hawaii 9,000 4,000 105,000 3,000 5,000Illinois 95,000 45,000 1,075,000 32,000 53,000Iowa 5,000 2,000 54,000 2,000 3,000Kentucky 42,000 20,000 478,000 14,000 24,000Maryland 32,000 15,000 365,000 11,000 18,000Massachusetts

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EffectsonFinancialSecurityWhileone importantgoaloftheMedicaidprogram istoensurethatenrolleeshaveaccesstomedicalcare,anequallyimportantgoalistoprotectfamiliesfromlargeoutofpocketmedicalcostsandensurethatillnessdoesnotthreatenfamiliesabilitytomeetotherimportantneeds.To quantify the improvements in financial security resulting from State decisions to expandMedicaidundertheAffordableCareAct,thisanalysisturnsonceagaintotheOHIE,whichfoundthatMedicaidcoveragesignificantlyimprovedfinancialsecurity.Thisanalysis focuseson twospecificoutcomesmeasured in theOHIE,whichweremeasuredusinginpersoninterviewstwoyearsafterthecoveragelottery: Catastrophicoutofpocketcosts.

Medicaidcoveragenearlyeliminated theriskof facingcatastrophicoutofpocketmedicalcosts(definedinthestudyasoutofpocketspendinginexcessof30percentofhouseholdincome)duringtheprioryear.Specifically,beingenrolledinMedicaidreducedtheprobabilityofexperiencingsuchanoutcomeby4.5percentagepoints,relativetoabaselineriskof5.5percentinthecontrolgroup.

Troublepayingbillsduetomedicalexpenses.

Medicaidcoveragedramaticallyreducedtheriskthatanindividualreportedhavingborrowedmoney or skipped paying other bills due to medical expenses during the prior year.Specifically, being enrolled in Medicaid reduced the probability of experiencing such anoutcomeby14.2percentagepoints,relativetoabaselineriskof24.4percentinthecontrolgroup.

TheOHIE also found thatMedicaid coverage reduced the average amount of outofpocketspendingandtheprobabilityofhavinganymedicaldebt.Inaddition,inearlierworkusingcreditreportdata,theOHIEinvestigatorsdocumentedalargereductionintheprobabilityofhavinghadamedicalbillsenttoacollectionagencyoverslightlymorethanoneyearoffollowup.Aswiththehealthcareutilizationresultsdiscussedinthelastsubsection,thefindingthathealthinsuranceimprovesfinancialsecurityisnotuniquetotheOHIE.FinkelsteinandMcKnight(2008)demonstrate that the introduction of Medicare in 1965 led to sharp reductions in seniorsexposuretolargeoutofpocketmedicalcosts.GrossandNotowidigdo(2011)examineMedicaidexpansionsduringthe1990sandearly2000sandfindthatthoseexpansionssignificantlyreducedtheriskofconsumerbankruptcy.88Usingcreditreportdata,theOHIEfoundnoevidenceofareductionintheriskofbankruptcyoverafollowupperiodextendingslightlymorethanoneyearfromthedatethatlotterywinnersgainedcoverage,despitefindinglargeimprovementsonothermeasuresoffinancialstrain.ThisdifferenceinresultscouldreflectthemuchlongerfollowupperiodavailabletoGrossandNotowidigdo.Alternatively,itcouldreflectdifferencesinthetypesofMedicaidexpansionsunderstudy;theexpansionsstudiedbyGrossandNotowidigdoprimarilyaffectedchildren,whiletheexpansionstudiedintheOHIEaffectedadults.ThelimitedsamplesizeavailableintheOHIEdoesnotappeartoexplainthedifferenceinresults,asthedifferencebetweentheestimatereportedbytheOHIEandtheestimatereportedbyGrossandNotowidigdoapproachesstandardthresholdsforstatisticalsignificance.

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TotranslatetheOHIEestimatesintothenumberofindividualsestimatedtoavoidthesenegativefinancialoutcomesineachState,theOHIEpointestimatewasmultipliedbytheHIPSMestimatesof the number of individuals estimated to gain coverage in that State if the State expandsMedicaidcoverage. TheresultingStatebyStateestimatesofthereduction inthenumberofindividuals facing adverse financial outcomes due to high outofpocket medical costs arereported inTable4. Figure4summarizes the reduction in the incidenceofadverse financialoutcomes that States that have not yet expanded Medicaid could achieve once expandedcoverageisfullyineffect,aswellasthegainsforStatesthathavealreadyexpandedtheprogram.Figure5mapstheStatelevelestimatesofthereductioninthenumberofindividualsborrowingmoney or skipping payments on other bills due tomedical expenses if each State expandsMedicaid.

1,000,000

800,000

600,000

400,000

200,000

0

CatastrophicOutofPocketMedicalCosts

BorrowingtoPayBillsorSkippingPaymentsDuetoMedicalExpenses

StatesExpandingMedicaidStatesNotYetExpandingMedicaid

Changeinannual numberofpeople experiencinglistedoutcome

Figure4:ProjectedReductionintheIncidenceofFinancialHardshipifStatesExpandMedicaid,byCurrentExpansion Status

Source:UrbanInstitute; Baickeretal.(2013);CEAcalculations.Note:Estimatesreflecteffectswhenexpandedcoverageisfullyineffect.Seetextformethodologicaldetails.

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PeoplewithCatastrophicOutofPocketCostsina TypicalYear

PeopleBorrowingtoPayBillsorSkippingPaymentsDuetoMedicalBills

NotYetExpandingMedicaid 255,000 809,400Alabama 10,500 33,400Alaska 1,200 3,700Florida 38,000 120,600Georgia 21,400 68,000Idaho 2,500 7,800Indiana 11,700 37,300Kansas 4,500 14,200Louisiana 11,900 37,700Maine 1,300 4,000Mississippi 7,400 23,500Missouri 11,300 36,000Montana 1,700 5,400Nebraska 2,200 6,800NorthCarolina 16,900 53,600Oklahoma 5,500 17,500Pennsylvania 13,700 43,400SouthCarolina 8,900 28,200SouthDakota 1,200 3,700Tennessee 10,500 33,300Texas 54,100 171,800Utah 3,300 10,500Virginia 9,400 29,900Wisconsin 5,400 17,100Wyoming 700 2,300

ExpandingMedicaid 193,600 614,400Arizona 2,300 7,300Arkansas 6,400 20,300California 62,300 197,700Colorado 6,900 21,900Connecticut 3,800 11,900Delaware 300 1,000DistrictofColumbia 900 2,700Hawaii 1,700 5,500Illinois 17,800 56,600Iowa 900 2,800Kentucky 7,900 25,200Maryland 6,000 19,200Massachusetts 100 300Michigan 9,500 30,100Minnesota 1,900 6,000Nevada 4,700 14,900NewHampshire 1,200 3,700NewJersey 10,200 32,300NewMexico 4,300 13,700NewYork 7,500 23,700NorthDakota 900 3,000Ohio 20,000 63,400Oregon 8,300 26,400RhodeIsland 1,200 3,700Vermont 200 600Washington 2,900 9,100WestVirginia 3,600 11,400

Table4.ReductioninNumberofPeopleFacingFinancialHardshipifStateExpandsMedicaid

Sources:UrbanInstitute;AmericanCommunitySurvey,20102012;CEAcalculations.Note:Estimates reflecteffectswhenexpandedcoverageisfullyineffect.Seetextfordetailsonthemethodology.Numbersmaynotsumduetorounding.Catastrophicmedicalcosts definedasmedicalcosts exceeding30percentofincome.

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EffectsonHealthOutcomesMedicaidalsoseeks to improveenrolleeshealth. The findingsaboveshowing thatMedicaidincreases receipt of recommended medical carecare for which there is a strong clinicalevidence base demonstrating its effectiveness in improving healthjustifies a strongpresumption that Medicaid does indeed improve enrollees health. Nevertheless, directevidencethathealthinsuranceimproveshealthisdesirable.Toquantifyeffectsonmentalhealth,thisanalysisturnsoncemoretotheOHIE.TheOHIEfoundthat Medicaid coverage reduced the probability that an individual screened positive fordepressionon thebasisofastandardeightquestionquestionnaireby9.2percentagepoints,relative toa30.0percentbaselineprobability in thecontrolgroup.9 Medicaidcoveragealso

9Asdiscussedbelow,thisanalysisdoesnotusetheOHIEtoquantifytheeffectsofMedicaidonphysicalhealth,astherelevantestimatesareimpreciseandnotstatisticallydifferentfromzero.OneconcernwithusingtheonlytheresultsfromtheOHIEthathappentobestatisticallysignificantisthat,asthenumberofhealthoutcomesunderconsiderationrises,theprobabilitythatonewillbestatisticallysignificantpurelybychancerisesaswell,evenif,intruth,Medicaidhasnoeffectonanyoftheseoutcomes.Inthiscase,focusingonthestatisticallysignificantestimatesanddisregardingtheotherscanbemisleading,aproblemstatisticiansandeconometriciansrefertoastheproblemofmultiplecomparisons.

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generated improvements inselfreportedmentalhealth,asmeasuredusingastandardthreequestionbatteryontheeffectofmentalhealthonqualityoflife.Two stepswere used to translateOHIEs estimate thatMedicaid reduced the probability ofscreening positive for depression into the reduction in the number of people actuallyexperiencingdepressionifeachStateexpandedMedicaid.First,thereductioninthenumberofpeoplewhowouldscreenpositive fordepressionwasobtainedbymultiplyingtheOHIEpointestimatebytheHIPSMestimatesofthenumberof individualswhowillgaincoverage ineachStateifthatstateexpandsitsMedicaidprogram.Priorresearchhasestimatedthat88percentofthosewhoscreenpositivefordepressionusingthisscreeningtoolarefoundtobeexperiencingmajordepressiononthebasisofaclinicalinterview(Kroenkeetal.2001).Thus,toobtainthefinalestimatesofthereductionintheincidenceofdepression,thereductioninthenumberofpositivescreeningresultswasmultipliedby0.88.10TheresultingStatebyStateestimatesofthereductioninthenumberofindividualsexperiencingdepressionarereportedinTable3.Turningtophysicalhealth,theOHIEprovidesclearevidencethatindividualsreceivingMedicaidperceived themselves tobe inbetterhealth. In results through approximately two yearsoffollowup,Medicaidcoverageincreasedtheshareofindividualsreportingthattheirhealthhadremained the same or improved over the prior year by 7.8 percentage points, relative to abaselineprobabilityof80.4percentinthecontrolgroup.Inearlierresultsthroughslightlymorethanoneyearoffollowup,Medicaidalsoincreasedtheprobabilitythatanindividualreportedthathisorherhealthwasgood,verygood,orexcellentby13.3percentagepoints,relativetoabaselineprobabilityof54.8percentinthecontrolgroup. TotranslatetheOHIEestimateoftheeffectofMedicaidonthenumberofindividualsreportingthattheyareingood,verygood,orexcellenthealthintoanestimateofthenumberofadditionalpeoplewhowouldassesstheirhealthinthiswayifeachStateexpandedMedicaid,theOHIEpointestimate is simplymultipliedby thenumberofpeoplewhowill gain coverage if each Stateexpands itsMedicaidprogram. TheresultingStatebyStateestimatesarereported inTable3andaremappedinFigure6.Figure7summarizestheimprovementsinthismeasureofhealththatStatesthathavenotyetexpandedMedicaidcouldachieveonceexpandedcoverageisfullyineffect,aswellasthegainsforStatesthathavealreadyexpandedtheprogram.Onewayofaddressingthisproblemistosetahigherthresholdforstatisticalsignificancewhenevaluatingtheresultsofmultiplestatisticaltests.Usingastandardmethodforcomputingthathigherthreshold(knownastheBonferronimethod)whiletakingintoaccountthatthestudyalsoexaminedeffectsonhighbloodpressure,cholesterollevels,andbloodsugarcontrol,thepvaluefortheestimatedeffectofMedicaidcoverageondepressionremainsbelow10percent.ThisindicatesthattheOHIEsdepressionresultsarestillunlikelytohavearisenbychance,evenafteraccountingformultiplecomparisons.10ThisapproachlikelyslightlyunderstatestheactualreductionindepressionasaresultofexpandingMedicaid.Kroenkeetal.demonstratethatthescreeningtoolusedbytheOHIEresearchersalsooccasionallymissesindividualswhoappeardepressedinaclinicalinterview.TotheextentthatMedicaidalsoreducesdepressionintheseindividuals,theeffectsontheoverallincidenceofdepressionwouldbecorrespondinglylarger.

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0100,000200,000300,000400,000500,000600,000700,000800,000

StatesExpandingMedicaid StatesNotYetExpandingMedicaid

Changeinnumberofpeoplereportinggood/verygood/excellenthealth

Source:UrbanInstitute;Finkelstein etal.(2012);CEAcalculations.Note:Estimatesreflecteffectswhenexpandedcoverageisfullyineffect.Seetextformethodologicaldetails.

Figure7:ProjectedIncreaseinNumberofPeopleReportingGood,VeryGood,orExcellentHealthifStatesExpandMedicaid,byCurrentExpansionStatus

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ThelimitedsamplesizeoftheOHIEmakesitmoredifficulttoreachfirmconclusionsabouttheeffect ofMedicaid on objectivemeasures of physical health since theOHIE estimatesweregenerallyimprecise.TheOHIEdidattempttomeasuretheeffectofMedicaidcoverageonseveralphysicalhealthoutcomes,includingtheincidenceofhighbloodpressure,highcholesterol,andpoorcontrolofbloodsugar.Thestudyspointestimates(roughlyspeaking,apointestimateisthemostlikelysinglevalueinlightofastudysdata)showedsomeimprovementineachofthesedomains.Forexample,thestudyspointestimatewasthatMedicaidreducedtheincidenceofelevatedbloodpressureby1.3percentagepoints,relativetoabaselineincidenceof16.3percentinthecontrolgroup;thepointestimatesfortheothermeasureddimensionsofphysicalhealthwere, inproportionalterms,similaror larger. Inearlyresults,theOHIEalsoreportedapointestimatesuggestingthatMedicaidreducedmortalityovera followupperiodofslightlymorethanoneyear. Thesepointestimateswouldgenerallybeclinicallymeaningful iftheyexactlyreflectedreality(Frakt2013a;Frakt2013b).However,theOHIEssamplesizewas(bynecessity)quite limited,sotheprecisionwithwhichthese changes in health outcomes could bemeasuredwas also limited. As a result, theseestimated improvements in physical health fell far short of statistical significance, and it isimpossibletodeterminewithanyconfidencewhetherthepointestimatesdescribedabovearosebecauseMedicaidactuallygeneratedimprovementsinphysicalhealthorifMedicaidactuallyhasnegligibleeffectsonphysicalhealth,andtheseestimatesweresimplyobtainedbychance.Forexample,whilethestudyspointestimatewasthatMedicaidreducedtheincidenceofhighbloodpressure by 1.3 percentage points, a 95 percent confidence interval around that estimatestretchesfroma7.2percentagepointreductioninincidencetoa4.5percentagepointincreasein incidence. Closely related, itmay not have been reasonable to expect theOHIE to findstatisticallysignificantimprovementsinphysicalhealthstemmingfromMedicaidcoverage.TobereliablydetectedbytheOHIE,theeffectsofMedicaidonphysicalhealthwouldhavehadtobequite large,often larger thanwhat seemsmedicallyplausible (Frakt 2013a; Frakt 2013b;Richardson,Carroll,andFrakt2013;Mulligan2013).In lightof the limitationsof theOHIE for learningabout theeffectsofMedicaidonobjectivephysical health outcomes, it is useful to examine a parallel literature that uses quasiexperiments createdbypastpolicy changes to studyhowMedicaid coverageaffectshealthoutcomes. The disadvantage of relying on quasiexperimental research is that it is morevulnerable to unobserved confounding factors than research using a randomized researchdesign.However,thesequasiexperimentalstudieshavetheimportantadvantagethattheycanoftendrawonmuchlargersamplesand,thus,delivermuchmorepreciseestimates.Two recent quasiexperimental studies are particularly relevant in this context since theyexamine insuranceexpansionsthat, likeStateMedicaidexpansionsundertheAffordableCareAct,primarilyaffectlowormoderateincomeadults.Sommers,Long,andBaicker(2014)studythe mortality effects of Massachusetts health reform, which primarily affected adults withincomessimilartoormodestlyhigherthanthoseaffectedbytheAffordableCareActsMedicaidexpansion, by comparing mortality trends in Massachusetts counties to mortality trends indemographicallysimilarcountiesintherestofthecountry.Theyfindthatthemortalityratefor

24

Massachusettsadultsfellby2.9percentfromtheyearsbeforereformtotheyearsafterreform,relative to the comparison counties. The authors document thatmortality followed similartrends inMassachusettscountiesandcomparisoncountiesbefore reform, that themortalitygainswereconcentrated incountieswith lower incomesand lower insurancecoverage ratespriortoreform,andthatthe improvementswereprimarily incausesofdeathbelievedtobeavoidablewithbetterhealthcare;allofthesefindingsareconsistentwiththeinterpretationthatthe observed fall in mortality in Massachusetts was caused by the expansion of insurancecoverage.Notably,theauthorsestimatefallswellwithintheverywide95percentconfidenceintervalassociatedwiththeimprecisecorrespondingOHIEestimate.Sommers,Baicker,andEpstein(2012)examinepreACAexpansionsofMedicaidcoveragetolowincomeadults inArizona,NewYork,andMaine. Much likeSommers,Long,andBaicker, theauthors estimate how these Medicaid expansions affected the risk of death by comparingmortalitytrends inthethreeexpansionstatestomortalitytrends inneighboringstates. Theyfindthatthemortalityrateforadultsfellby6.1percentintheexpansionstatesrelativetononexpandingStates intheyearsaroundthereform. Theydocumentthatmortalitytrendsweresimilarinexpansionandnonexpansionstatesbeforereformandthatthemortalitygainswereconcentrated in lowerincome counties, consistent with the interpretation that the fall inmortalityintheexpansionstateswascausedbyexpandedinsurancecoverage.ThisestimateisalsonotstatisticallydifferentfromtheimprecisecorrespondingOHIEestimate.Thesearenottheonlyquasiexperimentalstudiesexaminingthelinkbetweenhealthinsurancestatusandhealthoutcomes,althoughtheyarethetwothataremostrelevanttoevaluatingtheconsequencesofStatesMedicaidexpansiondecisions. CurrieandGruber (1994),CurrieandGruber(1996),MeyerandWherry(2012)examinepastMedicaidexpansionsaffectingpregnantwomen, children, and teens, respectively, and find that those coverage expansions reducedmortality. Card,Dobkin,andMaestas (2009)documentadiscrete reduction inmortality forpatientsarrivingatthehospitalwithnondeferrableconditionsatage65,coincidingwiththebeginningofeligibilityforMedicare.LevyandMeltzer(2008)undertakeacarefulreviewofthequasiexperimentalliteratureandconcludethat,whilethatliteratureisnotunanimousonthisquestion,thebalanceoftheevidencedemonstratesthatexpandingaccesstohealthinsurancecoverageimproveshealthforspecificwellstudiedpopulations.TheresultsfromSommers,Long,andBaicker(2014)andSommers,Baicker,andEpstein(2012)providestrongevidencethatthisgeneralconclusionthatexpandedcoverageimproveshealthappliestocoverageexpansionsthataffect lowandmoderateincomeadults, likeMedicaidexpansionsunder theAffordableCareAct.

EffectsonStateEconomiesandtheNationalEconomyInadditiontotheireffectson insurancecoverage,accesstohealthcare,andhealthandwellbeing,StatesdecisionstoexpandMedicaidwillalsohaveimmediatemacroeconomicbenefitsbydrawingadditionalFederalfundingintoStateeconomies.Asdescribedingreaterdetailbelow,thisadditionalFederalfundingwill increasedemand forbothmedicalandnonmedicalgoodsandservices.Overthenextfewyears,whiletherecoveryfromthe20072009recessionremains

25

incomplete and slack remains in the economy, this increase in demand will boost overallemploymentandeconomicactivity.Indetail,whenaStateelectstoexpanditsMedicaidprogram,theFederalgovernmentfinancesadditionalpaymentstomedicalprovidersintheStateinexchangeforprovidingmedicalservicestothenewMedicaidenrollees. TheseadditionalMedicaidoutlaysareonlypartiallyoffsetbyreducedFederalspendingonpremiumtaxcreditsandcostsharingassistanceforindividualsinthatStatewith incomesbetween100and138percentof theFPLwhoswitch from receivingcoveragethroughtheMarketplacestoreceivingcoveragethroughMedicaid.CEAhasuseddatafromtheCongressionalBudgetOfficeandUrbanInstitutedatatoestimatetheadditionalFederaloutlayseachStatewouldhavetriggeredifithadexpandedMedicaidbyJanuary1,2014; thedetailedmethodology ispresented inAppendixB. On thebasisof thismethodology,CEAestimatesthatifthe24StatesthathavenotyetexpandedMedicaidhaddonesoasofJanuary1,2014,thatwouldhavetriggeredanincreaseinFederaloutlaysinthoseStatestotaling$88billionduringcalendaryears2014through2016.StatesthathavealreadyexpandedMedicaidwillgenerateadditionalFederaloutlaysof$84billionduringthisperiod.StatebyStateestimates of the additional Federal outlays resulting from each States decision to expandMedicaidarereportedinTable5.11InordertoquantifytheeffectsoftheseadditionalFederaloutlaysonStateseconomiesandtheeconomyoftheNationasawhole,CEAhasundertakenastandardfiscalmultiplieranalysis.Inbrief,when the government purchases additional goods and services, that spurs hiring andpurchasesofinvestmentgoodsandrawmaterialstoproducethosegoodsandservices.Asthosenewlyhiredworkersandproducersspendthe incometheyhaveearned,theyspuradditionalhiringandpurchases,whichinturnsetsoffyetanotherroundofincreasesinspending,andsoon. Economists summarize this sequenceofmacroeconomiceffectsviaa fiscalmultiplier,whichmeasuresthetotalnumberofdollarsofadditionaleconomicactivityarisingfromaonedollarfiscalchange.The2014EconomicReportofthePresidentprovidesadetaileddiscussionofthe theoretical basis for this type of analysis and the empirical literature underlying CEAsestimatesofthemultiplierfordifferenttypesoffiscalchanges(CEA2014).Asdescribedtherein,CEAsmultiplierestimatesfallwellwithintherangeofestimatesusedbyotheranalysts,includingtheCongressionalBudgetOffice.Theappropriatemultiplier touse forevaluating themacroeconomicconsequencesofStatesMedicaidexpansiondecisionsdependsonhowtheadditionalFederaloutlaystriggeredbyStatesdecisionsenterStateeconomies.Inpractice,theseoutlayswilltakethreemainpaths: Additionalutilizationofmedicalcare.11Notethat,whilethisanalysisfocusesoncalendaryearsthrough2016becausethesearemostrelevantforquantifyingtheshortrunmacroeconomicimpacts,generousFederalsupportforStatesthatelecttoexpandMedicaidwouldcontinueinsubsequentyears.ExpandingMedicaidwouldthusremainanattractivepropositionforStatessincetheycouldcontinuetorealizethedirectbenefitsofexpandedcoverageatlimitedcost,eventhoughStatesdecisionswouldnolongerboostoveralleconomicoutput.

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Consistentwiththeevidencedescribedearlierinthisreport,muchoftheadditionalFederalfundingwillfundadditionalmedicalcarefornewlyenrolledMedicaidenrollees, increasingoveralldemandformedicalgoodsandservices.Fordollarsenteringtheeconomythisway,CEAusesaGDPmultiplierof1.5,consistentwithCEAsestimateofthemultiplierfordirectgovernmentspending.

Loweroutofpocketmedicalcosts.Alsoconsistentwith theevidencepresentedearlier in this report,someof theadditionalFederal fundingwill protect enrollees from high outofpocketmedical costs, permittingfamiliestoredirectdollarstootherpressingneedsandboostingdemandforawidevarietyofgoodsandservices.12Fordollarsenteringtheeconomythisway,CEAusesaGDPmultiplierof 1.5, consistent with CEAs estimate of the multiplier for payments to lowincomehouseholds.

Reductionsinuncompensatedcare.TheremainderoftheadditionalFederalfundingwillcompensateprovidersforthecostofprovidingcarethatpreviouslywentunreimbursed.Inturn,thosefundswillflowthroughtothe entities that were previously bearing the cost of that uncompensated care, somecombination of State and local governments, privatelyinsured individuals, and medicalproviders.13Thoseadditionalfundswillpermitthoseentitiestoincreasetheirdemandforgoodsandservices(or,inthecaseofgovernments,reducetaxesonhouseholds,increasinghouseholdsdemandforgoodsandservices).ForreductionsinuncompensatedcarecostsbornebyStateandlocalgovernments,CEAusesamultiplierof1.1,consistentwithCEAsestimateofthemultiplierforpaymentstoStateandlocal governments. For other reductions in uncompensated care costs,CEA uses aGDPmultiplierof0.8,consistentwithCEAsestimateofthemultiplierapplicabletoindividualtaxcuts.

12Reductionsinfamiliesexposuretooutofpocketmedicalcostscouldboostcurrentdemandforgoodsandservicesthroughanotherchannelbycausingfamiliestodrawdownprecautionarysavingsthattheyhavepreviouslyusedtoselfinsureagainstmedicalrisk.Inthesimplestmodels,reductionsinprecautionarysavingimproveeconomicefficiencyeveninthelongrunsinceprecautionarysavingrepresentsahighcostwayofprotectingagainstrisk,althoughmorecomplicatedmodelscanleadtodifferentconclusions.GruberandYelowitz(1999)providesomeevidencethatpastMedicaidexpansionshaveindeedreducedprecautionarysaving.BecausethemacroeconomicestimatespresentedinthisreportdonotaccountforeffectsofMedicaidexpansionsonprecautionarysaving,theyaresomewhatconservative.13TheFederalgovernmentissharinginreductionsinuncompensatedcarecostsundertheAffordableCareActthroughstatutoryreductionsindisproportionatesharehospital(DSH)paymentsmadeviatheMedicaidandMedicareprograms.ThereductionsoccurregardlessofStatedecisionstoexpandMedicaid,sotheyarenotrelevanttothemacroeconomicanalysisundertakenhere.

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Based on recent estimates of per capita uncompensated care costs among the uninsured(Coughlin et al., 2013), a reasonable estimate is that around 30 percent of the additionalMedicaidspendingwilldefrayuncompensatedcarecosts.14While,inpractice,Stateandlocalgovernmentsarelikelytorealizeasignificantfractionofthesesavings,intheinterestofbeingconservative,CEAhasassumedthatthesesavingsaccrueentirelytoprovidersandotherpayers,which leads to a composite multiplier of 1.29 for each additional dollar of Federal outlaysresultingfromaStatesdecisiontoexpandMedicaid.Themagnitudeofthiscompositemultiplierisnot particularly sensitive to alternative assumptions about the extent towhich expandingMedicaid defrays uncompensated care costs versus entering the economy through otherchannels.

TogenerateestimatesofthemacroeconomiceffectofStateMedicaidexpansiondecisions,theestimated fiscal effects of State decisions to expand Medicaid and the multiplier estimatesdescribedabovewereusedasinputsintotheCEAmultipliermodel,whichhasbeendescribedinpreviousCEApublications(CEA2014).TheCEAmodelthenproducesquarterlyestimatesoftheeffect of States decisions about whether to expand Medicaid on employment and overalleconomicactivity.15TheestimatesgeneratedbytheCEAmultipliermodelassumethat,asisthecasenow,thereisslack intheeconomyandproductiveresourcesarenotfullyemployed.16 Whentheeconomyreturnstofullemployment,thesedemandsideeffectswillbecomemuchsmallerandeventuallydisappear entirely because an increase in labor demand in one sector will mostly tend toreallocateworkersawayfromothersectors. Lookingforward,theFederalReserveandmanyprivateforecastersexpecttheeconomytoremainshortoffullemploymentuntillate2016.Forthepurposesofthisanalysis,theCEAassumesthatFederaloutlaysspurredbyStatesMedicaidexpansiondecisionswillhavetheirfullmacroeconomiceffectsthroughthemiddleof2015andthat theseeffectsphasedowngradually thereafter, reaching zeroby thebeginningof2017.Whilethisapproach issomewhatadhoc, it likelyprovidesareasonableapproximationoftheactualeffects.

14ThisestimateisbroadlyconsistentwithuncompensatedcareestimatesproducedbyHIPSM,thesourceforthecoverageestimatesusedelsewhereinthisreport.TheHIPSMestimatesimplythatStatedecisionstoexpandMedicaidwillreduceoveralluncompensatedcarecostsby$183billionovertenyears,whichis28percentofthe$645billionincreaseinnetFederaloutlaysifallStatesexpandtheprogramthatwasestimatedbyHIPSM(Holahanetal.2012).Totheextentthatreductionsinuncompensatedcarerepresentasmallershareoftheadditionaloutlays,themacroeconomiceffectsofStatedecisionstoexpandMedicaidwouldbecommensuratelylarger.15TheestimatesproducedbythismodelreflecttheNationaleffectsonemploymentandeconomicactivityresultingfromeachStatesdecisiontoexpandMedicaid.WhilethebenefitsofeachStatesdecisionarelikelytofalldisproportionatelyinthatState,becauseStatesareeconomicallyinterconnected,someofthosebenefitswillaccruetootherStates.Forexample,CaliforniahaslikelyrealizedsomeeconomicbenefitsfromArizonasdecisiontoexpandtheprogramandviceversa.StatesdecisionstoexpandMedicaidare,thus,importantfortheNationasawhole,notjusttheStatesmakingthosedecisions.16BecausealloftheStatebyStateestimatesusethesamenationalmultipliermodel,theseestimatesdonotaccountfordifferenceintheextenttowhichthereisslackinparticularStatelabormarkets.Ingeneral,thismeansthatthejobcreationeffectsofStatesMedicaidexpansiondecisionsmaybelarger(andlongerlasting)inStateswithweakerlabormarketsandsmaller(andshorterlived)inStateswithstrongerlabormarkets.

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StatebyStateestimatesoftheeffectonemploymentandtotaloutputifeachStatedecidestoexpandMedicaidarereportedinTables5and6.Figure8summarizesthenumberofjobsthatStatesthathavenotyetexpandedMedicaidcouldhavecreatediftheyhadexpandedtheprogramasofJanuary1,2014,aswellasthegainsthatwillbeachievedbyStatesthathavealreadyexpandedtheprogram.Figure9mapsthecumulativejobyearsfrom2014through2017thatwouldhavebeencreatedifeachStatehadexpandedMedicaidasofJanuary1,2014.Whilethissubsectionfocusesontheshortrunmacroeconomicbenefitsofexpandedinsurancecoverage,StatesdecisionstoexpandMedicaidcouldaffectemploymentandeconomicactivityoverthe longerrunaswell. Healthierworkerswhoare lessfinanciallystressedand inbettermentalhealthmaybemoreable toeffectivelyparticipate in the labor forceandhavehigherproductivityonthejob.Ontheotherhand,accesstocoveragethroughMedicaidwouldlikelycause someworkers to reduce their labor supply, eitherbecause havingMedicaid coverageeliminate theneed towork inorder toobtainhealth insuranceorbecauseMedicaid causesindividuals to choose to work less in order to avoid losing access to Medicaid coverage.17Reductionsinlaborsupplyofthelatterkindgenerallyreduceeconomicefficiency.Incontrast,reductions in laborsupplyof the formerkindcan improveeconomicefficiency if theypermitworkerstochoosetopursueahighervaluealternativeactivitylikecaringforchildrenorotherfamilymembers,pursuingadditionaleducation,orstartingabusiness;somereductionsinthiscategoryarecommonlydescribedasreflectingreductionsinjoboremploymentlock. TheevidenceontheneteffectsofMedicaidonlaborsupplyforpopulationslikethoseaffectedtheAffordableCareActsMedicaidexpansionismixed.ThehighestqualityevidencecomesfromtheOHIE,which concluded thatMedicaidenrollmenthad small and statistically insignificanteffectsonlaborsupply(Baickeretal.2013b).Somenonrandomizedquasiexperimentalstudieshave,however, found thatMedicaidcausesstatisticallysignificantreductions in laborsupply.Dague,DeLeire,andLeininger(2014)studyanepisodeinwhichaportionofWisconsinsMedicaidprogramwasclosedtonewenrollmentandconcludethatMedicaidenrollmentdrovemodestreductions in labor supply. Garthwaite, Gross, and Notowidigdo (2014) study a largescaledisenrollmentfromTennesseesTennCareprograminthemid2000sandestimatemuchlargereffectsonlaborsupply.Itisgenerallynotclearwhatportionsoftheselaborsupplyresponsesoccurthroughchannelsthatincrease,reduce,ordonotaffecteconomicefficiency.ThereasonswhydifferentstudieshavereachedwidelydifferingconclusionsabouttheeffectofMedicaidonlaborsupplyisnotwellunderstood.Thedifferencescouldreflectdifferencesinthepopulationsaffectedbythesedifferentpolicychangesorthetimeperiodduringwhichthosechangesoccurred. Notably,thepopulationstudiedbyGarthwaite,Gross,andNotowidigdo issomewhathigher incomethanthepopulationaffectedbytheAffordableCareActsMedicaidexpansion.Anotherpossibilityisthatthedifferencesreflectstatisticalsamplingerrors;because

17OtherportionsoftheAffordableCareActscoverageexpansioncoulddriveincreasesinlaborsupply.Forexample,forindividualswhowereeligibleforMedicaidbeforetheAffordableCareAct,expandedMedicaideligibilityandtheavailabilityofMarketplacecoveragemeansthattheycannowincreasetheirlaborsupplywithoutworryingthattheywilllosetheirhealthinsurancecoverage.

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noneofthestudiesareabletomeasureeffectsonlaborsupplywithabsoluteprecision(withtheGarthwaite, Gross, and Notowidigdo study being particularly imprecise), it would not besurprisingtoseesomedispersion intheseestimateseven ifallthestudiesaremeasuringthesameunderlyingresponse.Finally,thedifferencescouldarisebecausethequasiexperimentalestimatesarecontaminatedbyunobserveddifferencesbetweenthosewhodoanddonotenrollinMedicaidthattheauthorsareunabletofullycontrolfor,inwhichcasetheexperimentalresultfromtheOHIEwouldprovidetheonlyreliableestimate.Inanycase,laborsupplyresponsesarenotlikelytobeparticularlyrelevanttomacroeconomicoutcomesduringtheperiodexaminedinthisreport.Aslongasslackremainsinthelabormarketandtherearemoreworkersseekingworkthanthereareavailablejobopenings,aworkerwhoreduceshislaborsupplyduetotheavailabilityofMedicaidcoveragewilloftensimplybereplacedbyanotherjobseeker(CBO2014a).Thus,anylaborsupplyeffectsthatdoexistarelikelytobesubstantiallyattenuatedforthenextfewyears.

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0

40,000

80,000

120,000

160,000

200,000

2014 2015 2016

StatesExpandingMedicaid

StatesNotYetExpandingMedicaid

Numberofjobs

Source:CongressionalBudgetOffice;Urban Institute;CEAcalculations.

Figure8:ProjectedIncreaseinEmploymentifStatesExpandMedicaid,byCurrentExpansionStatus

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2014 2015 2016Cumulative,20142016

2014 2015 2016CumulativeJobYears,20142017

NotYetExpandingMedicaid 26,480 29,760 31,870 88,110 84,800 183,800 103,100 378,700Alabama 1,020 1,220 1,390 3,630 3,200 7,300 4,300 15,100Alaska 100 110 120 330 300 700 400 1,400Florida 4,410 5,060 5,530 15,010 14,100 30,900 17,600 63,800Georgia 2,270 2,620 2,880 7,770 7,200 15,900 9,100 32,900Idaho 200 210 210 620 600 1,300 700 2,700Indiana 950 940 860 2,760 3,100 6,300 3,100 12,800Kansas 290 280 250 820 1,000 1,900 900 3,800Louisiana 1,010 1,120 1,200 3,330 3,200 7,000 3,900 14,400Maine 210 240 260 710 700 1,500 800 3,000Mississippi 1,020 1,210 1,370 3,600 3,200 7,200 4,300 15,000Missouri 1,170 1,330 1,440 3,950 3,700 8,200 4,600 16,900Montana 120 120 110 350 400 800 400 1,600Nebraska 160 160 140 460 500 1,100 500 2,200NorthCarolina 2,740 3,220 3,600 9,560 8,700 19,400 11,300 40,200Oklahoma 520 560 570 1,650 1,700 3,500 1,900 7,300Pennsylvania 2,460 2,770 2,970 8,200 7,900 17,100 9,600 35,200SouthCarolina 1,030 1,160 1,250 3,450 3,300 7,200 4,000 14,800SouthDakota 130 140 150 420 400 900 500 1,900Tennessee 1,500 1,730 1,900 5,130 4,800 10,500 6,000 21,700Texas 4,180 4,640 4,910 13,730 13,400 28,800 16,000 59,400Utah 200 120

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2014 2015 2016Cumulative,20142017

NotYetExpandingMedicaid 19,610 32,150 14,670 66,440Alabama 740 1,280 620 2,650Alaska 70 120 60 250Florida 3,250 5,420 2,520 11,190Georgia 1,670 2,790 1,310 5,770Idaho 150 230 100 480Indiana 730 1,080 430 2,240Kansas 220 320 130 670Louisiana 750 1,220 550 2,520Maine 150 260 120 530Mississippi 740 1,280 620 2,640Missouri 870 1,430 660 2,960Montana 90 140 60 280Nebraska 130 180 70 380NorthCarolina 2,010 3,410 1,630 7,040Oklahoma 390 620 270 1,280Pennsylvania 1,820 2,990 1,370 6,180SouthCarolina 760 1,250 580 2,590SouthDakota 100 160 70 330Tennessee 1,100 1,850 870 3,810Texas 3,100 5,040 2,270 10,420Utah 170 180 30 370Virginia 690 1,130 510 2,340Wisconsin 590 950 430 1,970Wyoming 60 100 40 210

ExpandingMedicaid 18,200 30,240 14,040 62,470Arizona 350 400 80 830Arkansas 600 980 450 2,020California 3,470 5,870 2,790 12,130Colorado 500 840 390 1,730Connecticut 390 640 290 1,330Delaware 90 140 70 300DistrictofColumbia 40 70 30 140Hawaii 160 260 120 530Illinois 1,060 1,740 800 3,590Iowa 160 220 80 450Kentucky 890 1,510 720 3,120Maryland 700 1,270 650 2,610Massachusetts 340 580 280 1,190Michigan 830 1,360 620 2,800Minnesota 230 340 130 690Nevada 290 500 240 1,040NewHampshire 120 190 90 400NewJersey 830 1,440 710 2,980NewMexico 150 170 20 340NewYork 2,660 4,570 2,210 9,440NorthDakota 120 200 100 420Ohio 2,700 4,590 2,190 9,470Oregon 490 660 220 1,360RhodeIsland 150 250 120 520Vermont 50 100 50 200Washington 380 590 250 1,230WestVirginia 450 770 370 1,590

Table6.IncreaseinGrossDomesticProductifStateExpandsMedicaidAdditionalGDP(MillionsofDollars;CalendarYears)

Sources:UrbanInstitute;CongressionalBudgetOffice;CEAcalculations.Notes:Seetextfordetailsonthemethodology.Numbersmaynotsumduetorounding.

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III. ConclusionThisreportdocumentsthefarreachingbenefitsthatStatesthathavealreadyexpandedMedicaidunder the Affordable Care Act will receive, and the benefits that States that have not yetexpandedtheprogramcouldachieveiftheyelectedtodoso.Inparticular,thisanalysisshowsthatbyexpandingtheirMedicaidprograms,Statescanimproveaccesstoessentialmedicalcare,reducefinancialhardship,improvetheircitizensmentalhealthandwellbeing,andclaimbillionsofdollarsinFederalfundingthatcouldboosttheireconomiestoday.TheAdministrationhopesthatmoreStateswilldecidetotakeadvantageoftheseopportunitiesinthemonthsandyearsaheadandstandsreadytoworkwithStatestomaketheseopportunitiesareality.

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Dague,Laura,andThomasDeLeire,andLindseyLeininger.2014.TheEffectofPublicInsuranceCoverageforChildlessAdultsonLaborSupply.WorkingPaper20111.Cambridge,MA:NationalBureauofEconomicResearch.

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Finkelstein,AmyandRobinMcKnight.2008.WhatdidMedicareDo?TheInitialImpactofMedicareonMortalityandOutofPocketMedicalSpending.JournalofPublicEconomics92,no.7:16441668.

Finkelstein,Amy,etal.2012.TheOregonHealthInsuranceExperiment:EvidencefromtheFirstYear.TheQuarterlyJournalofEconomics127,no3:10571106.

Frakt,Austin.2013a.MyReplytoJimManzi.http://theincidentaleconomist.com/wordpress/myreplytojimmanzi/.

______.2013b.TheOregonMedicaidStudyandCholesterol.http://theincidentaleconomist.com/wordpress/theoregonmedicaidstudyandcholesterol/.

Garthwaite,Craig,TalGross,andMatthewNotowidigdo.2014.PublicHealthInsurance,LaborSupply,andEmploymentLock.QuarterlyJournalofEconomics129,no.2:653696.

Gruber,JonathanandAaronYelowitz.1999.PublicHealthInsuranceandPrivateSavings.JournalofPoliticalEconomy107,no.6:12491274.

GuttmacherInstitute.2014.MedicaidFamilyPlanningEligibilityExpansions.http://www.guttmacher.org/statecenter/spibs/spib_SMFPE.pdf.

Gross,TalandMatthewJ.Notowidigdo.2011.Healthinsuranceandtheconsumerbankruptcydecision:EvidencefromexpansionsofMedicaid.JournalofPublicEconomics95,no78:767778.

Heberlein,Marthaetal.2013.GettingintoGearfor2014:Findingsfroma50StateSurveyofEligibility,Enrollment,Renewal,andCostsharingPoliciesinMedicaidandCHIP,20122013.http://kaiserfamilyfoundation.files.wordpress.com/2013/05/8401.pdf.

Holahan,John,MatthewBuettgens,StanDorn.2013.TheCostofNotExpandingMedicaid.http://kaiserfamilyfoundation.files.wordpress.com/2013/07/8457thecostofnotexpandingmedicaid4.pdf.

Holahan,John,etal.2012.TheCostandCoverageImplicationsoftheACAMedicaidExpansion:NationalandStatebyStateAnalysis.http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8384.pdf.

Huang,ElbertS.andKennethFinegold.2013.SevenMillionAmericansLiveinAreasWhereDemandforPrimaryCareMayExceedSupplybyMorethan10Percent.HealthAffairs32,no.3:614621.

(KFF)KaiserFamilyFoundation.2009.ExpandingHealthCoverageforLowIncomeAdults:FillingtheGapsinMedicaidEligibility.http://kaiserfamilyfoundation.files.wordpress.com/2013/01/7900.pdf.

______.2010.ExpandingMedicaidtoLowIncomeChildlessAdultsUnderHealthReform:KeyLessonsfromStateExperiences.http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8087.pdf.

Kenney,GenevieveM.,etal.2012.OptingintotheMedicaidExpansionundertheACA:WhoAretheUninsuredAdultsWhoCouldGainCoverage?http://www.urban.org/UploadedPDF/412630optinginmedicaid.pdf.

Kroenke,Kurt,RobertL.Spitzer,JanetB.W.Williams.2001.ThePHQ9:ValidityofaBriefDepressionSeverityMeasure.JournalofGeneralInternalMedicine16,no.9:606613.

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Long,SharonK.etal.2014.EarlyEstimatesIndicateRapidIncreaseinHealthInsuranceCoverageundertheACA:APromisingStart.http://hrms.urban.org/briefs/earlyestimatesindicaterapidincrease.html.

McWilliams,MichaelJ.etal.2007.UseofHealthServicesbyPreviouslyUninsuredMedicareBeneficiaries.NewEnglandJournalofMedicine357,no.2:143153.

Meyer,BruceD.andWherry,LauraR.SavingTeens:UsingaPolicyDiscontinuitytoEstimatetheEffectsofMedicaidEligibility.WorkingPaper18309.Cambridge,MA:NationalBureauofEconomicResearch.

Mulligan,CaseyB.2013.ThePerilsofSignificantMisunderstandingsinEvaluatingMedicaid.TheNewYorkTimes.http://mobile.nytimes.com/blogs/economix/2013/06/26/theperilsofsignificantmisunderstandingsinevaluatingmedicaid/.

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Richardson,Sam,AaronCarroll,AustinFrakt.2013.MoreMedicaidStudyPowerCalculations.http://theincidentaleconomist.com/wordpress/moremedicaidstudypowercalculationsourrejectednejmletter/.

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Sommers,BenjaminD.,KatherineBaicker,andArnoldM.Epstein.2012.MortalityandAccesstoCareamongAdultsafterStateMedicaidExpansions.TheNewEnglandJournalofMedicine367,no.11:10251034.

Sommers,BenjaminD.,SharonK.Long,andKatherineBaicker.2014.ChangesinMortalityafterMassachusettsHealthCareReform:AQuasiExperimentalStudy.AnnalsofInternalMedicine160,no.9:585593.

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AppendixA:EstimatingtheAgeandGenderMixofIndividualsWhoWouldGainCoverageifTheirStateExpandsMedicaidSeveraloftheOHIEestimatesoftheeffectofMedicaidonreceiptofpreventivecareapplyonlytoparticularageorgendersubgroups. Unfortunately, thepublishedHIPSMestimatesof theincreaseininsurancecoveragearisingfromStatesdecisionstoexpandMedicaiddonotdetailtheagesandgendersofthe individualswhowouldgaincoverage. Toaddressthis issue,CEAestimated the shareofnewMedicaidenrolleeswho fall in the relevant subgroupsusing theCensus Bureaus American Community Survey (ACS), a large household survey that collectsinformation on income, insurance status, state of residence, and other relevant familycharacteristics.18Indetail, thiswasdone in two steps. First,CEA identified individuals likely togaincoveragethroughMedicaid if their State expanded the program using the following criteria; namely,individualswho:(1)areadultsage19to64withfamilyincomeunder138percentoftheFPL;(2)werenoteligibleforMedicaidunderpreACAStateMedicaidincomeeligibilitycriteria;19(3)donot report being enrolled inMedicaid;20 and (4) do not report being enrolled in employersponsoredcoverage.Amongthatgroup,itisstraightforwardtoestimatetheshareofpotentialnewenrolleesfallingineachagegendersubgroupofinterest.Thesesharescanthenbeappliedto theStatelevelHIPSMestimates toobtain the increase in insurance ineach relevantagegendersubgroupasaresultofeachStatesdecisiontoexpandMedicaid.In implementing this approach, income isdefined as total cash incomeminus SupplementalSecurity Income and meanstested cash assistance (e.g. Temporary Assistance for NeedyFamilies),adefinitionthatcloselymatchesmodifiedadjustedgrossincome(MAGI),theincomedefinitionused toassesseligibility forMedicaidunder theAffordableCareAct. Due todatalimitations,certainothertypesofincomethatarenotincludedinMAGI(e.g.childsupport)couldnotbeexcludedfromtheincomemeasureused,butanyresultingbiasesarelikelytobesmall.Families units were defined using an algorithm for defining health insurance units (HIUs)developed by State Health Access Data Assistance Center (SHADAC). A description of thisalgorithmandprogramsforimplementingitareavailablefromtheSHADACwebsite.21Itisimportanttonotethatthisapproachhascertainlimitations.First,Medicaidcoverageisonlyavailabletocitizensandcertainlegalresidents,andthisapproachmakesnoattempttoaccountforthefactthattheACSincludesmanyineligiblenoncitizens.Second,themethodusedtomodel

18ThisanalysisusestheIPUMSUSApreprocessedextractsoftheACSforyears20102012(Rugglesetal.2010).19InformationonpreACAeligibilitycriteriaareobtainedfromvariousreportsproducedbytheKaiserFamilyFoundation(CohenRoss,etal.2009;KFF2009;KFF2010).PreACAeligibilitycriteriaasthoseineffectin2009;thisapproachisconsistentwithHIPSM,whichalsousestreatspreACAeligibilitycriteriaasthoseineffectin2009(Holahanetal.2012).20ThisprovidesacrudewayofexcludingindividualswhowereeligibleforMedicaidbeforetheAffordableCareActasaresultviamoreexpansiveeligibilitycriteriathatareapplicableonlytospecificgroups,likethosewithdisabilities.Thesemoredetailedeligibilitycriteriaarechallengingtomodelinsurveydata.21Seehttp://www.shadac.org/publications/definingfamilystudieshealthinsurancecoverage.

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preACAMedicaideligibility rules issomewhatcrude,andmoresophisticatedmethodsmightgivebetterresults.Notably,however,Kenneyetal.(2012)handlebothoftheseissuesinmoresophisticatedwaysandarriveatbroadlysimilarestimatesoftheshareofpotentialnewenrolleesfalling inspecifiedageandgendergroups. Finally, individualspropensitytoactuallyenroll inMedicaidcoveragemaydifferacrossageandgendergroups;failingtoaccountforthesedifferingenrollmentpropensitiescouldcause thisapproach tooverstateorunderstate thenumberofindividualsgainingcoverageineachofthesegroups.

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Appendix B: Estimating Effects on Federal Outlays if States ExpandMedicaidThemost important input intoanalyzinghowStatedecisions toexpandMedicaidaffect totalemploymentandoveralleconomicactivityishoweachStatesdecisionaffectsFederaloutlays.CEAestimatedtheseamountsintwosteps.First,estimatesfromtheCongressionalBudgetOffice(CBO)wereusedtoestimatethetotalchangeinFederaloutlaysifallstatesexpandedMedicaidrelativetoifnostatesexpandedtheprogram.Second,CEAdistributedthatnationaltotalacrossStatesusingHIPSMestimates.Thisappendixdescribeseachstepingreaterdetail.Focusingfirstonthenationaltotals,thenetchangeinFederaloutlaysifallstateselecttoexpandMedicaidconsistsof twocomponents: (1)an increase inFederaloutlays reflectingadditionalspendingonMedicaidcoverage;and (2)areduction inFederalcosts toprovidepremium taxcreditsandcostsharingassistance. The second,offsetting, component reflects the fact thatsomeindividualsinfamilieswithincomesbetween100and138percentoftheFPLwillreceivecoveragethroughMedicaid iftheirStatedoesexpandtheprogramandwould insteadobtaincoverage through theMarketplace if their statesdoesnotexpandMedicaid. CEAusedCBOestimatestoestimatethesizeofeachofthesetwocomponentsinascenarioinwhichallStatesexpandedMedicaid,relativetoascenarioinwhichnoStatesexpandedMedicaid. ToestimatethedirecteffectonFederalMedicaidoutlays,thestartingpointwasCBOsMarch2012estimatesoftheeffectoftheAffordableCareActscoverageexpansiononFederalMedicaidspending(CBO2012a).BecausetheseestimatespredatetheSupremeCourtsdecisioninNFIBv.Sebelius,theyimplicitlyreflecttheincreaseinFederalMedicaidoutlaysifallStatesexpandtheprogram.22CEAthenadjustedtheseamountstoreflectchangesinCBOsassumptionsregardingperenrolleeMedicaidcosts fromCBOsMarch2012baseline to itsApril2014baseline (CBO2014b).23Toestimatetheoffsettingsavingsonpremiumtaxcreditsandcostsharingassistance,CEAusedCBOsestimateofhow theSupremeCourtsdecision inNFIBv.Sebeliusaffectedthecostsoftheseprograms (CBO2012b). CBOestimated that theSupremeCourtdecisioncauseda$28billion increase inMarketplacesubsidycosts infiscalyear2022. CBOalso indicatedthattheyassumedthattwothirdsoftheoverallexpansionpopulationwouldliveinStatesthatdeclinedtoexpand theMedicaidprogram for individualsbetween100and138percentof theFPL. Thisestimateimpliesthat,ifallStatesdeclinedtoexpandtheprogram,thereductioninpremiumtax

22Inprinciple,theseestimatesalsoincludeFederalspendingassociatedwithpreviouslyeligibleindividualswhowouldnewlyenrollinMedicaideveniftheirStatefailedtoexpandtheprogram,perhapsduetoenhancedoutreachassociatedwiththeMarketplaces.Inpractice,thenumberofsuchindividualsislikelytoberelativelysmall,soincludingthemisunlikelytosignificantlyaffecttheresultsofthisanalysis.23Specifically,CEAusedthepercentchangeinCBOsprojectionofperenrolleecostsforchildren.Whilecosttrendsforchildrenmaydifferslightlyfromthoseforadults,thechangesinCBOsreportedperenrolleecostsforadultsincorporatechangesinthecompositionoftheMedicaidpopulationcausedbychangesinStatesdecisionsaboutwhetherornottoexpandMedicaid.Assuch,theycannotbeusedtoadjustforchangesinunderlyingperenrolleecostsacrossdifferentvintagesofCBOsprojections.

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credit and costsharing assistance costs would be 50 percent larger than the $28 billionreferencedabove,soCEAscaledupthe$28billionestimateaccordingly.CEAthenprojectedthisfiscalyear2022estimatebacktothepresentbyassumingitwouldgrowinproportiontototalMarketplace subsidy costs reported in CBOs March 2012 baseline. Finally, similar to theMedicaid estimates, the resulting stream of costs was adjusted for changes in perenrolleesubsidycostsfromCBOsMarch2012baselinetoitsApril2014baseline.24,25Todistributethesenationalamountsacrossstates,CEArelieduponestimatesfromtheUrbanInstitutesHIPSM(describedinthemaintext).Specifically,incrementalMedicaidoutlaysweredistributedacrossStatesusingHIPSMsStatebyStateestimatesof the incrementalMedicaidoutlaysin2016ifeachStateelectstoexpandcoverage.TheoffsettingsavingsonpremiumtaxcreditsandcostsharingassistanceweredistributedusingtheStatespecificdifferencebetweentheincreaseinMedicaidenrollmentandtheincreaseinoverallinsurancecoveragethatoccursifthatStateexpendsMedicaid(onceagain,usingestimatesfor2016);thisdifferenceapproximatesthenumberofindividualswhowouldswitchfromreceivingcoveragethroughtheMarketplacetoreceivingcoveragethroughMedicaidiftheStateexpandedMedicaid.26Asa finalnote, forthepurposesofusingtheseestimateswiththeCEAmultipliermodel, it isnecessarytoconvertthefiscalyearestimatesthatresultfromthemethodologydescribedaboveto quarterly estimates. In doing so, CEA assumed that Medicaid and Marketplace outlaysoccurringduringfiscalyear2014willoccursmoothlyoverthefinalthreequartersofthefiscalyear(consistentwiththefactthatthemaincoverageexpansionsundertheAffordableCareActtookeffectonJanuary1,2014).Insubsequentfiscalyears,CEAassumedthatoutlaysoccurredsmoothlyoverthefiscalyear.Whiletheactualtimepathoftheseoutlayslikelydiffersslightlyfromthisassumedpath,anyerrorinheassumedpathislikelytohaveverysmalleffectsontheoverallconclusionofthisanalysis.

24CBOsperenrolleesubsidyestimatesareforcalendaryears,whiletheoutlayestimatesareforfiscalyears.Inmakingthisadjustment,CEAusedanappropriateblendofthecalendaryearperenrolleeestimatestoadjusteachfiscalyearestimate.25TheoverallchangeinperenrolleesubsidycostsfromCBOsMarch2012baselinetoitsApril2014baselinemaydifferfromthechangeinperenrolleecostsforagivenenrolleewithincomebetween100and138percentofFPL,forseveralreasons.First,premiumtaxcreditcoversalargershareofthetotalpremiumforthisgroupthanfortheaverageenrollee,andtheseindividualsreceivecostsharingassistance,unlikesomehigherincomeenrollees.Inaddition,someofthechangeinperenrolleecostsfromCBOsMarch2012baselinetoitsApril2014baselinemayreflectcompositionalchangesifindividualswhowereswitchedfromMedicaidtotheMarketplacesbytheSupremeCourtDecisiondifferfromthetypicalMarketplaceenrollee.Theeffectoftheseimperfectionsontheoverallresultsofthisanalysisarelikelytobequitesmall.26Thisdifferencemayalsoreflectsomeoffsettingreductioninthenumberofindividualsenrolledinemployercoverage,butitappearsthatthereductioninMarketplacecoverageistheprimarycomponent.Inanycase,theStateleveloutlayestimatesarerelativelyinsensitivetotheprecisemethodusedtodistributetheoffsettingtaxcreditandcostsharingassistancecosts.