Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232424 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 8827
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
This paper investigates the short-run impact of public insurance expansion under the Affordable Care Act on out-of-pocket medical spending (OOP) and risk exposure among low-income, eligible households as well as the incidence of the cost of providing insurance. Using data from the Medical Expenditures Panel Survey (MEPS), I exploit exogenous variation in Medicaid eligibility rules across states, income groups and time. I find that public insurance eligibility reduced mean OOP by 18.2% among targeted households, but it did not causally increase total expenditures among beneficiaries. Rather, Medicaid expansion shifted the burden of payment from eligible households and private insurance (17% reduction) to taxpayers in the form of public insurance (45.7% increase). The efficiency of these public funds can be summarized by a Marginal Value of Public Funds ranging from 0.06 to 0.59 that is highest for households with at least one pre-existing condition.
Subjects: 
public health insurance
risk protection
MVPF
Medicaid
out-of-pocket expenditures
Affordable Care Act
JEL: 
D04
D61
H44
I13
Document Type: 
Working Paper
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