Lower-income adults in the US are more likely to lack health insurance and to suffer worse health, a correlation that raises the long-standing question of whether health insurance affects health. In Saved by Medicaid: New Evidence on Health Insurance and Mortality from the Universe of Low-Income Adults (NBER Working Paper 33719), Angela Wyse and Bruce D. Meyer present new evidence on this question by evaluating the consequences of recent Medicaid expansions. 

The largest national study to date on the effects of recent Medicaid expansions suggests that the program reduced the mortality risk of new enrollees by about 21 percent.

To study the impact of Medicaid on mortality, the researchers exploit variation in the state-level adoption and timing of expansions of Medicaid eligibility to childless, nondisabled, non-elderly adults. Most, but not all, of these expansions occurred in 2014 under the provisions of the Affordable Care Act. The researchers link administrative data spanning the years 2010 to 2022 from the Census Bureau, the Internal Revenue Service, and the Centers for Medicare and Medicaid Services. The resulting dataset provides comprehensive information on income, Medicaid enrollment, and all-cause mortality for 37.5 million nondisabled adults who, in 2010, had income below 138 percent of the federal poverty line and were between the ages of 19 and 59.

For this population, Medicaid enrollment in a given year increased by 12 percentage points (49 percent) more in states that expanded Medicaid than in states that did not. Medicaid expansion decreased mortality by 2.5 percent relative to the change in mortality in non-expansion states. The estimated effect is proportionally similar across demographic groups, which suggests that Medicaid expansions averted more deaths for groups with higher baseline mortality rates, such as older adults. However, the researchers emphasize that Medicaid expansions appear to have reduced mortality across most age and demographic groups, including those that are typically considered lower risk. 

Under the assumption that Medicaid expansion affected mortality only for the low-income adults who enrolled in Medicaid in response, the estimates suggest that Medicaid enrollment caused a 21 percent reduction in the mortality hazard of the typical new enrollee. The researchers use these estimates to calculate that Medicaid expansions saved the lives of approximately 27,400 people in Medicaid expansion states in the years after the expansions. This suggests that an additional 12,800 deaths in non-expansion states could have been averted if those states had expanded Medicaid in 2014. 

The researchers estimate that the direct budgetary cost of Medicaid expansion was about $5.4 million per life saved. They note that Medicaid expansion may have had other benefits that are not included in their mortality calculation, such as improved health-related quality of life, longer-term mortality gains, and financial risk reduction. 

The researchers conclude that universal Medicaid enrollment could eliminate about 5 to 20 percent of the existing mortality gap between Americans in the highest and lowest income quintiles. While the differences in health insurance coverage contribute to the socioeconomic gradient in health, they do not fully explain it. “Even if all uninsured people in the United States enrolled in Medicaid,” the researchers write, “substantial mortality disparities between high- and low-income individuals would persist.”

The researchers acknowledge funding from the National Institute on Aging, the Alfred P. Sloan Foundation, the Russell Sage Foundation, the Charles Koch Foundation, the Menard Family Foundation, and the American Enterprise Institute.