Spillovers in Public Benefit Enrollment: How does Expanding Public Health Insurance for Working-Age Adults affect Future Health Insurance Choices?

Enrollment in one public benefit program often affects enrollment in others. We study life-course spillovers by examining how access to publicly subsidized health insurance prior to age 65 affects public benefit choices at the age of Medicare eligibility. We use administrative data to examine several Medicare enrollment choices: the heavily under-subscribed Medicaid “dual” coverage as a supplement to Medicare; Medicare Part D; the Part D Low Income Subsidy (LIS); and Medicare Advantage. Focusing on people living in low-income zip codes, we find a large increase in dual Medicaid among new Medicare beneficiaries in Medicaid expansion states relative to non- expansion states, as well as corresponding increases in healthcare use and reductions in out-of-pocket spending. The dual Medicaid increase exerts a bonus effect: greater take-up of LIS and Part D programs, which we attribute to the accompanying automatic enrollment in these programs. Our results on Medicare Advantage enrollment are inconclusive. Overall, our results suggest that experience with Medicaid before age 65 causes meaningful behavioral responses among the lowest-income beneficiaries when they age into Medicare; this emphasizes the importance of longitudinal spillovers also present in other public programs with eligibility criteria that differ by applicant age (e.g., Supplemental Nutrition Assistance Program (SNAP) and Supplemental Security Income (SSI)).