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Frean, Molly; Gruber, Jonathan; Sommers, Benjamin D.
Journal of health economics, 05/2017, Volume: 53Journal Article
•We examine which policies increased coverage under the Affordable Care Act (ACA).•We assessed premium subsidies, the individual mandate, and Medicaid expansion.•Premium subsidies created 40% of the ACA coverage increase, and Medicaid 60%.•Medicaid was 30% woodwork effect, 10% early expansion, 20% newly-eligible adults.•The mandate penalty amount had negligible effects on coverage gains. Using premium subsidies for private coverage, an individual mandate, and Medicaid expansion, the Affordable Care Act (ACA) has increased insurance coverage. We provide the first comprehensive assessment of these provisions’ effects, using the 2012–2015 American Community Survey and a triple-difference estimation strategy that exploits variation by income, geography, and time. Overall, our model explains 60% of the coverage gains in 2014–2015. We find that coverage was moderately responsive to price subsidies, with larger gains in state-based insurance exchanges than the federal exchange. The individual mandate's exemptions and penalties had little impact on coverage rates. The law increased Medicaid among individuals gaining eligibility under the ACA and among previously-eligible populations (“woodwork effect”) even in non-expansion states, with no resulting reductions in private insurance. Overall, exchange premium subsidies produced 40% of the coverage gains explained by our ACA policy measures, and Medicaid the other 60%, of which 1/2 occurred among previously-eligible individuals.
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