The Redistributive Effects of Federal Medicaid Outlays Across Counties: Evidence from the ACA

Laura Montenovo, Kosali Simon and Coady Wing

No 34758, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine how Medicaid expansion under the Affordable Care Act reshaped federal transfer inflows to counties using state Medicaid expansions between 2014 and 2017. We show that the ACA expansion increased federal Medicaid transfers by $361 per capita in expansion counties. Using our estimates, we forecast that non-expansion counties would gain $554 per capita if they expanded Medicaid. These transfers flow to counties with lower tax capacity and lower gross income. Our findings suggest that Medicaid expansion was a health policy intervention that also functioned as a budgetary mechanism reshaping federal to local transfers and fiscal smoothing across U.S. counties.

JEL-codes: H10 H20 H27 I13 (search for similar items in EconPapers)
Date: 2026-01
Note: EH PE
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