The Impact of Eligibility for Medicaid versus Subsidized Private Health Insurance on Medical Spending, Self-Reported Health, and Public Program Participation

Silvia Helena Barcellos, Mireille Jacobson and Helen G. Levy

American Journal of Health Economics, 2023, vol. 9, issue 2, 262 - 295

Abstract: We use a regression discontinuity design to understand the impact of a sharp change in eligibility for Medicaid versus subsidized marketplace insurance at 138 percent of the federal poverty line on coverage, medical spending, health status, and other public program participation. We find a 5.5 percentage point shift from Medicaid to private insurance, with no net change in coverage. The shift increases individual health spending by $341 or 2 percent of income, with larger increases at higher points in the spending distribution. Two-thirds of the increase is from premiums and one-third from out-of-pocket medical spending. Self-rated health and other public program participation appear unchanged. We find no evidence of bunching below the eligibility threshold, which suggests either that individuals are willing to pay more for private insurance or that optimization frictions are high.

Date: 2023
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