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The relationship between health insurance and early retirement: Evidence from the Affordable Care Act (Aslim, 2019)

Review Guidelines

Absence of conflict of interest.

Citation

Aslim, E. G. (2019). The relationship between health insurance and early retirement: Evidence from the Affordable Care Act. Eastern Economic Journal, 45(1), 112-140.

Highlights

  • The study’s objective was to examine the impact of the Affordable Care Act's (ACA) Medicaid expansion on the Medicaid enrollment and retirement decisions of low-educated adults aged 55-64. 

  • Medicaid is a nationwide public health insurance program that provides insurance to eligible low-income adults, children, pregnant women, elderly adults, and people with disabilities.1 In 2014, in accordance with the ACA, states could choose to expand their Medicaid program eligibility to include higher household incomes than had previously been allowed. As of August 2021, 38 states and the District of Columbia had expanded their Medicaid program eligibility.2The author used a quasi-experimental difference-in-differences design that uses the differences in timing around each state’s expansion of their Medicaid programs to create treatment and comparison groups using data from the 2010-2016 Public Use Micro Samples (PUMS) of the American Community Survey (ACS). 

  • The study found statistically significant, positive impacts on Medicaid enrollment for both men and women as well as on retirement decisions for women. Medicaid expansion was associated with a statistically significant 5 percentage point increase of men’s Medicaid enrollment and a statistically significant 6 percentage point increase of women’s Medicaid enrollment. The study also found that Medicaid expansion was associated with a statistically significant 0.6 percentage point increase in women’s probability of retiring.  The study found no statistically significant impacts on men’s probability of retiring. 

  • The study receives a moderate evidence rating because it was based on a well-implemented quasi-experimental design. This means we are somewhat confident that the estimated effects are attributable to the Affordable Care Act's (ACA) Medicaid expansion and not to other factors. 

Intervention Examined

Affordable Care Act (ACA)

Medicaid expansion

Features of the Intervention

The Affordable Care Act's (ACA) Medicaid expansion sought to expand access to Medicaid for a broader group of low-income, "childless" adults—that is, those without dependent children. Medicaid is a public health insurance option for low-income Americans. Following the ACA Medicaid expansion, most states expanded coverage to a larger share of low-income individuals. Medicaid may cover a number of health services and is mandated to include inpatient and outpatient hospital services, nursing facility services, and laboratory and X-ray services, among others. 

Eligibility for Medicaid varies by state. In most states, the ACA Medicaid expansion provided access to Medicaid to those earning less than 138% of the Federal Poverty Level. 

Features of the Study

The author uses a difference-in-differences design that uses differences in the timing of state Medicaid expansion to create treatment and comparison groups for the study. To examine the impact of Medicaid expansion on Medicaid enrollment and retirement decisions of childless adults ages 55-64, the study author compared the differences in outcomes before and after expansion for individuals in Medicaid expansion states (i.e., the treatment group) to the differences in outcomes during the same time period in non-expansion states (i.e., the comparison group).  By examining the differences in trends before and after the 2014 Medicaid expansion in these two groups, the study author estimated the likely impact of Medicaid expansion on men and women’s Medicaid enrollment and retirement outcomes. For most analyses, the sample includes childless adults ages 55-64 from a total of 37 states. Most analyses include data for 302,998 men and 272,305 women.  

This study uses data from the Public Use Micro Samples (PUMS) of the American Community Survey (ACS) for 2010-2016. The PUMS data include information on health insurance (including Medicaid enrollment), labor market outcomes, and demographic characteristics, as well as geographic identifiers. Most analyses use data from 37 states, with 19 states classified as expansion states, having implemented the Medicaid expansion in January 2014, while 18 states were non-expansion states had not implemented the Medicaid expansion as of December 2016. The author compared the outcomes of individuals before and after the Medicaid expansion in January 2014, statistically controlling for trends in states that did not implement the expansion.

Findings

Public Benefit Receipt 

  • Medicaid expansion was associated with a statistically significant 5 percentage point increase in Medicaid enrollment for men and a statistically significant 6 percentage point increase in Medicaid enrollment for women. 

Employment 

  • Medicaid expansion was associated with a statistically significant 0.6 percentage point increase in retirement probability for women. There were no statistically significant findings for men. 

Considerations for Interpreting the Findings

The analysis was a well-conducted nonexperimental study. The author notes that data lacked the survey month, and therefore monthly variation could not be captured in the included regression controls. They describe this as a minor limitation.

Causal Evidence Rating

The study receives a moderate evidence rating because it was based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to the Affordable Care Act's (ACA) Medicaid expansion, and not to other factors. 

Reviewed by CLEAR

February 2022

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