Medicaid Expansion: What Research Shows About Health Effects in States That Expanded

Medicaid expansion under the Affordable Care Act, which allowed states to extend Medicaid eligibility to adults with incomes up to 138 percent of the federal poverty level, has become one of the largest natural experiments in healthcare policy in American history. Following the Supreme Court's 2012 ruling that made expansion optional, states have adopted it on a rolling basis, creating variation in expansion timing that researchers have exploited to study the effects of insurance coverage expansion on health outcomes, hospital finances, and state budgets. The accumulating research provides a detailed picture of what Medicaid expansion has and has not produced. Coverage gains from Medicaid expansion have been substantial. Research using survey data and administrative records finds that uninsurance rates fell significantly more in expansion states than in non-expansion states following 2014, with the largest gains among the low-income population targeted by the expansion. Studies estimate that expansion states reduced their uninsured populations by an average of 40 to 50 percent among newly eligible adults, compared to much smaller reductions in non-expansion states. These coverage gains are the most directly measurable effect of expansion and are consistent across research using different data sources and methodologies. Mortality effects of Medicaid expansion are among the most important outcomes researchers have examined. Studies using difference-in-difference designs that compare mortality trends in expansion and non-expansion states before and after 2014 find significant reductions in mortality rates in expansion states relative to non-expansion states. Research published in peer-reviewed journals including the Journal of the American Medical Association finds reductions in all-cause mortality and specific cause reductions in cardiovascular mortality, cancer mortality, and other categories. These findings are consistent with what theory would predict given the known effects of insurance coverage on access to preventive care and treatment for serious illness. Healthcare utilization patterns changed in ways consistent with expanded access. Research finds that expansion states showed increases in primary care visits, preventive care receipt, and prescription drug utilization among newly enrolled populations, while emergency department visits for ambulatory-care sensitive conditions declined. This pattern reflects the shift from emergency-focused care by the uninsured to more continuous and preventive care by those with coverage, which is the intended effect of coverage expansion. Hospital financial effects of Medicaid expansion have been studied extensively, given that hospitals bear a significant portion of uncompensated care costs when the uninsured receive care. Research finds that expansion states experienced significant reductions in uncompensated care costs and in the frequency of uninsured hospitalizations, improving hospital financial performance particularly for safety net hospitals serving high proportions of low-income patients. Reductions in hospital closures in expansion states compared to non-expansion states have been documented, with research finding that rural hospitals particularly benefited from expansion in states that adopted it. State budget effects of expansion have been studied in the context of concerns that expansion would impose unsustainable financial burdens on state budgets. The ACA provided federal matching funds at 100 percent initially, declining to 90 percent after 2020 and maintained at that level. Research on the net budget effects of expansion finds that states that expanded Medicaid generally experienced net fiscal benefits due to reductions in state spending on programs previously used to cover the uninsured, savings in the criminal justice and mental health systems, and economic activity generated by federal health spending in the state. Behavioral health services access improved substantially following Medicaid expansion. Medicaid coverage for newly eligible adults included mental health and substance use disorder benefits as required by the ACA's essential health benefits requirements, extending coverage to populations with high rates of these conditions. Research on behavioral health effects of expansion finds increases in substance use disorder treatment admissions, reductions in overdose mortality in some analyses, and improvements in mental health outcomes in population surveys. States that have not expanded Medicaid include a significant share of the lower-income, uninsured population nationally. Research on the coverage gap, which affects individuals with incomes above the traditional Medicaid threshold but below the income level that qualifies for marketplace subsidies, finds that these individuals are more likely to forgo care due to cost, to have worse health outcomes, and to rely more heavily on emergency care than those in expansion states. The long-term fiscal and health costs of non-expansion have been estimated by researchers to exceed the state costs of expansion, though these projections involve assumptions about how non-expansion states would fund care for uninsured populations absent expansion.