Essays on the Affordable Care Act mandates and their effects on labor supply and health outcomes
Date
2020
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Publisher
University of Delaware
Abstract
In this dissertation, I study the effects of the Affordable Care Act advance premium tax credits, or ACA “subsidy”, on labor supply for households that are not offered employer-sponsored health insurance using premium data from the Robert Wood Johnson Foundation linked to the Medical Expenditure Panel Survey from 2010 to 2017. Due to a sharp decrease to zero in the subsidy for households above 400 percent of the poverty line, households near this cutoff have a financial incentive to reduce their income by decreasing their labor supply at the intensive and/or extensive margins. Thus, I calculate the “potential lost subsidy” (PLS) for households near the cutoff as the subsidy they would receive at exactly 400 percent of the poverty line but may lose if earning just above it. On average, the PLS equals $100 a month for younger workers but is four to six times larger for older workers and greatly varies by geographic location and family size. Using OLS and probit regressions, I estimate the impacts of the discontinuity in subsidy on labor supply. I find that income and hours of work do not statistically change from one year to another as the PLS increases. Moreover, there is no evidence that the probability one of the household members stops working increases as the PLS gets larger. This null effect is a moderately precise zero and suggests that the ACA subsidy design does not distort labor supply nor creates income manipulation for households near the 400% FPL cutoff. ☐ I also study the impacts of the Medicaid coverage gap in non-expansion states on labor supply for low-income households. As a result of the Medicaid non-expansion and premium tax credits starting at 100 percent of the poverty line, households just below this threshold face a new labor supply incentive and upward discontinuity in their budget at the poverty line. Using a difference-in-differences approach and the Annual Social and Economic Supplement (ASEC) of the CPS from 2010 to 2018, I estimate labor supply changes within very poor households in Medicaid non-expansion states. I find a significant increase in labor supply at the intensive margin. In particular, childless adults in non-expansion states increase their usual weekly hours by 2 hours a week (estimates equal to 1.7 and 2.3 depending on the specification). However, the coverage gap does not affect the extensive margin of labor supply, and there is no evidence that overall, very poor households adjust their income in response to the Medicaid non-expansion. It is crucial that policy programs provide affordable health coverage to very poor households, especially as some of them try to respond to the unintended incentive of low-priced health insurance at the poverty line and more individuals may fall into the coverage gap due to adverse income shocks. ☐ Finally, I reassess the impact of medical marijuana laws on opioid overdose mortality in light of the ACA Medicaid expansion using the 1999-2018 multiple cause-of-death mortality data from the National Vital Statistics System. Recent studies find that medical marijuana dispensaries reduce opioid-related mortality as medical marijuana patients may substitute marijuana for opioids. However, the opioid epidemic is getting worse, and little is known about the impacts of Medicaid expansion on opioid mortality rates. I revisit Powell et al. (2018) on the effects of medical marijuana laws on opioid-related mortality by (1) controlling for early Medicaid expansion, a potentially confounding variable in their study from 1999 to 2013, and (2) extending the analysis to 2018 to provide long-term effects of both medical marijuana dispensaries and Medicaid expansion on opioid overdose mortality. While controlling for early Medicaid expansion does not change the magnitude of Powell’s results, I find that early Medicaid expansion significantly reduced opioid-related death rates by 25% before 2014. In addition, when extending the data to 2018, the strong effect of dispensaries persists as they are associated with a 25% reduction in opioid-related death rates. Finally, I find no evidence that higher opioid death rates are caused by Medicaid expansion by 2018 suggesting that Medicaid expansion does not exacerbate the opioid epidemic. Rather, medical marijuana dispensaries and Medicaid expansion via the coverage of opioid use disorder treatments may be part of the solution in addressing the opioid crisis. ☐ Keywords: Affordable Care Act, Labor Supply, Subsidies, Medicaid Expansion, Opioids, Substance Abuse, Medical Marijuana Laws
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Keywords
Affordable Care Act, Labor supply, Medicaid expansion, Opioids, Subsidies, Substance abuse