Premium subsidies, the mandate, and Medicaid expansion: Coverage effects of the Affordable Care Act

J Health Econ. 2017 May:53:72-86. doi: 10.1016/j.jhealeco.2017.02.004. Epub 2017 Mar 6.


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.

Keywords: Health insurance; Individual mandate; Medicaid; Tax credits.

MeSH terms

  • Computer Simulation
  • Eligibility Determination / economics
  • Eligibility Determination / legislation & jurisprudence
  • Financing, Government / economics*
  • Financing, Government / legislation & jurisprudence
  • Financing, Government / statistics & numerical data
  • Humans
  • Insurance Coverage / economics*
  • Insurance Coverage / legislation & jurisprudence
  • Insurance Coverage / trends
  • Insurance, Health / economics*
  • Insurance, Health / legislation & jurisprudence
  • Insurance, Health / trends
  • Medicaid / economics*
  • Medicaid / legislation & jurisprudence
  • Medicaid / trends
  • Medically Uninsured / legislation & jurisprudence
  • Medically Uninsured / statistics & numerical data*
  • Models, Economic
  • Patient Protection and Affordable Care Act / economics*
  • Patient Protection and Affordable Care Act / standards
  • United States