Disability Heterogeneity in the Impact of the ACA’s Medicaid Expansions on Disability Employment

Objectives To test for heterogeneous treatment effects in the impact of the Affordable Care Act’s (ACA) Medicaid expansion on the employment of people with disabilities.
 

Methods Using difference-in-difference approaches, we estimate the impact of the ACA’s Medicaid expansion on employment outcomes for various subgroups of people with disabilities. Using the Current Population Survey (CPS) from June 2008 to December 2019, we segment the disabled population by disability type, disability recency and labor force attachment, leveraging the longitudinal aspect of the CPS.

Results Among persons with higher labor force attachment, we find that Medicaid expansion reduced the employment rate of persons with new disabilities by a statistically significant -3.2%, while there was a precisely estimated null effect for persons with ongoing disabilities. Among those with lower labor attachment, we find suggestive evidence of offsetting treatment effects among persons with new versus ongoing disabilities. Medicaid expansion increased the employment rate of persons with ongoing disabilities by 10.5% but decreased the employment rate of persons with new disabilities by -9.2%. However, these latter estimates for persons with lower labor force attachment are imprecisely estimated, limiting the conclusions that can be drawn from them.

Conclusions Existing literature on the disability employment effects of Medicaid expansion is mixed in part due to different study designs picking up different effects on distinct groups of people with disabilities. We show that accounting for disability heterogeneity allows for more precise estimates of policy impacts for some populations while providing suggestive evidence of countervailing treatment effects for others.