Early Impact of the Affordable Care Act on Social Security Disability Insurance Benefits

We explore spillovers between social programs providing health insurance to low income populations under the Affordable Care Act (ACA) and the Social Security Disability Insurance (DI) program, which provides health insurance and cash benefits to disabled workers. The effect of the ACA on DI benefits is theoretically ambiguous. While subsidized insurance may decrease reliance on DI by providing an alternative avenue for health insurance for those who would otherwise lack health insurance, the ACA may increase DI applications among those who otherwise rely on employer-sponsored insurance (ESI) by reducing the cost of DI’s two-year waiting period for Medicare. The empirical literature on the effects of the ACA has thus far been hampered by lack of data allowing researchers to identify individuals with and without ESI who would benefit differentially from the Medicaid expansion and Marketplace subsidies. We use a novel data set of the universe of U.S. tax records spanning 2007-2016 to overcome these limitations. We implement two research designs. First, we estimate the effect of the Medicaid expansions on the share of new DI beneficiaries with family income under 100% of the Federal Poverty Level (FPL) and are unable to detect a statistically significant effect. Second, we estimate the effect of low vs. high Marketplace subsidies on the share of new DI beneficiaries with family income between 138 and 400% FPL and find some evidence consistent with larger subsidies increasing DI claiming among those with prior access to ESI and decreasing DI claiming among those without prior access to ESI.