Medicaid Expansion Did Not Result In Significant Employment Changes or Job Reductions in 2014

Medicaid expansion undertaken through the Affordable Care Act (ACA) is already producing major changes in insurance coverage and access to care, but its potential impacts on the labor market are also important policy considerations. 

Economic theory suggests that receipt of Medicaid might benefit workers who would no longer be tied to specific jobs to receive health insurance (known as job lock), giving them more flexibility in their choice of employment, or might encourage low-income workers to reduce their hours or stop working if they no longer need employment-based insurance. Evidence on labor changes after previous Medicaid expansions is mixed. 

To view the impact of the ACA on current labor market participation, we analyzed labor-market participation among adults with incomes below 138 percent of the federal poverty level, comparing Medicaid expansion and nonexpansion states and Medicaid-eligible and -ineligible groups, for the pre-ACA period (2005-13) and the first fifteen months of the expansion (January 2014-March 2015). Medicaid expansion did not result in significant changes in employment, job switching, or full- versus part-time status. 

While we cannot exclude the possibility of small changes in these outcomes, our findings rule out the large change found in one influential pre-ACA study; furthermore, they suggest that the Medicaid expansion has had limited impact on labor-market outcomes thus far.

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By:  Gooptu A1, Moriya AS2, Simon KI3, Sommers BD4.

• 1Angshuman Gooptu is a doctoral student in the School of Public and Environmental Affairs at Indiana University, in Bloomington.
• 2Asako S. Moriya (Asako.Moriya@ahrq.hhs.gov) is a service fellow economist in the Center for Financing, Access and Cost Trends at the Agency for Healthcare Research and Quality, in Rockville, Maryland.
• 3Kosali I. Simon is a professor in the School of Public and Environmental Affairs at Indiana University and a research associate at the National Bureau of Economic Research in Cambridge, Massachusetts.
• 4Benjamin D. Sommers is an assistant professor in the Department of Health Policy and Management at the Harvard T.H. Chan School of Public Health and in the Department of Medicine at Brigham and Women's Hospital, in Boston, Massachusetts.
• Health Aff (Millwood). 2016 Jan 1;35(1):111-8. doi: 10.1377/hlthaff.2015.0747. 

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