Premium Subsidies, the Mandate, and Medicaid Expansion: Coverage Effects of the Affordable Care Act

Molly Frean, Jonathan Gruber, Benjamin D. Sommers

NBER Working Paper No. 22213
Issued in April 2016, Revised in December 2016
NBER Program(s):Children, Health Care, Health Economics, Public Economics

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 essentially no crowd-out of 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.

download in pdf format
   (484 K)

email paper

A non-technical summary of this paper is available in the 2016 number 2 issue of the NBER Bulletin on Aging and Health. You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22213

Published: Molly Frean & Jonathan Gruber & Benjamin D. Sommers, 2017. "Premium subsidies, the mandate, and Medicaid expansion: Coverage effects of the Affordable Care Act," Journal of Health Economics, vol 53, pages 72-86.

Users who downloaded this paper also downloaded* these:
Simon, Soni, and Cawley w22265 The Impact of Health Insurance on Preventive Care and Health Behaviors: Evidence from the 2014 ACA Medicaid Expansions
Kowalski w20597 The Early Impact of the Affordable Care Act State-By-State
Kaestner, Garrett, Gangopadhyaya, and Fleming w21836 Effects of ACA Medicaid Expansions on Health Insurance Coverage and Labor Supply
Hu, Kaestner, Mazumder, Miller, and Wong w22170 The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Wellbeing
Courtemanche, Marton, Ukert, Yelowitz, and Zapata w22182 Impacts of the Affordable Care Act on Health Insurance Coverage in Medicaid Expansion and Non-Expansion States
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us