Healthcare Cost-Sharing and the Economic Security of Social Security Disability Insurance Beneficiaries: Medicaid Expansion and the SSDI-Medicare Population
Although a growing literature has focused on the impact of cash benefits of Social Security Disability Insurance (SSDI), beneficiaries also eventually gain coverage by Medicare—one of the few under-65 groups eligible for Medicare. This health care coverage has significant value given the limited health insurance alternatives available to the long-term disabled given their chronic health conditions; however, original Medicare carries with it substantial cost-sharing and premiums. Dual eligibility with Medicaid has been a source of supplemental coverage for the disabled population but, prior to 2014, only for those who could satisfy Medicaid’s asset and income tests. State-level Medicaid expansions, beginning in 2014, expanded a supplemental coverage option to a broader swath of the under-65 Medicare population—beneficiaries who resided in the states that expanded Medicaid and had income under 138 percent of the federal poverty line (FPL). In this article, we rely on difference-in-differences techniques to estimate the impact of Medicaid expansion on supplemental coverage for the SSDI-Medicare population, and the subsequent effects on beneficiaries’ physician visits and health care spending. We find a statistically robust average increase in Medicaid coverage of 4.0-5.5 percentage points among SSDI-Medicare beneficiaries (an over 10 percent increase relative to baseline Medicaid coverage rates). There is substantial heterogeneity in this increase, however, with disproportionate large increases in coverage among white beneficiaries, beneficiaries with self-care or ambulatory difficulties, rural beneficiaries, and married beneficiaries without children. Although impacts on most other outcomes were statistically insignificant, we found a significant reduction in any out-of-pocket medical spending, consistent with Medicaid’s limits on cost-sharing, as well as a decrease in premiums paid by rural beneficiaries. Our findings contribute to the growing literature on the effects of Medicaid expansion, specifically in the smaller body of work examining the effects of increasing coverage on the intensive margin; it also adds to the smaller literature on the structure of health insurance coverage of the disabled-Medicare population.
The research reported herein was performed pursuant to grant RDR18000003 from the US Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium. The opinions and conclusions expressed are solely those of the author(s) and do not represent the opinions or policy of SSA, any agency of the Federal Government, or NBER. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the United States Government or any agency thereof.