Medicaid is the largest means-tested transfer program in the United States. At an annual cost of over $700 billion, the program insures one in four people in the United States, with enrollment rising by 50% between 2010 and 2021. Despite this substantial investment, credible estimates of the impacts of Medicaid on adult mortality remain limited. Motivated by this, in this paper, the authors examine whether expanding Medicaid eligibility leads to reductions in mortality, particularly among low-income adults.
The authors focus on the Medicaid expansions implemented under the Affordable Care Act, which states adopted in a staggered manner beginning in 2014. To estimate the causal effect of health insurance on mortality, they use data on 37 million low-income adults, constructed by linking the 2010 Census to administrative tax and mortality records. They compare mortality outcomes in states before and after expansion and find the following:
- Medicaid expansions increased enrollment by 12 percentage points and reduced mortality by 2.5% in the low-income adult population. These estimates suggest that people who enrolled in Medicaid experienced a 21% reduction in their mortality risk, on average, assuming no spillovers on those who did not enroll.
- Mortality reductions accrued not only to older age cohorts, but also to younger adults, who accounted for nearly half of life-years saved due to their longer remaining lifespans and large share of the low-income adult population.
- Medicaid expansions saved the lives of 27,400 people between the 2010 passage of the Affordable Care Act and 2022, and a further 12,800 deaths could have been avoided in states that did not expand Medicaid.
- These expansions appear to be cost effective, with direct budgetary costs of $5.4 million per life saved and $179,000 per life-year saved falling well below valuations of life commonly found in the literature.
- The authors estimate that 5–20% of the mortality gap between low- and high-income Americans could be attributed to differences in health insurance coverage.
Medicaid saves lives. This research highlights the significant health improvements caused by Medicaid expansions and avoidable deaths in states that have not yet expanded, while also bringing attention to potential adverse consequences from administrative barriers to Medicaid enrollment, the unwinding of continuous enrollment policies established during the COVID-19 pandemic, and other proposed restrictions to Medicaid currently under debate in Congress.
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