Does the Expansion of Medicaid Lead to Income Adjustment---Evidence from SIPP

Mingjian Li

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines whether Medicaid expansion under the Affordable Care Act (ACA) led to strategic income reductions to qualify for coverage. Using monthly data from the Survey of Income and Program Participation (2013–2019) and a regression discontinuity design, this paper finds that childless households in expansion states with earnings just above the eligibility threshold reduced their lowest monthly earnings by 39 percentage points of the Federal Poverty Level (roughly $700 for a two-person household) relative to those just below. The effect intensified as the mandate penalty increased and diminished after its repeal. Evidence suggests earnings adjustments along both intensive and extensive margins. The paper reinforces the validity of using the lowest monthly earning to identify Medicaid eligibility and provides the first evidence of a substantial labor supply response to the ACA

Keywords: Medicaid; The ACA; Mandate Penalty; Labor Supply; Earning Adjustments (search for similar items in EconPapers)
JEL-codes: H31 I13 I18 J22 (search for similar items in EconPapers)
Date: 2025-05-29
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:125043

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