Labor mobility and the Affordable Care Act: Heterogeneous impacts of the preexisting conditions provision

Abstract

The Patient Protection and Affordable Care Act (ACA) preexisting conditions provision ensures that insurance companies can no longer deny coverage, charge higher premiums, or exclude coverage due to a preexisting health condition. In this paper, we evaluate the impact of the provision on labor mobility. We use data from the Panel Study of Income Dynamics for years 2009 through 2019 and estimate difference‐in‐differences models to determine whether the provision improved labor mobility for individuals with chronic conditions. While females respond along the extensive margin by being less likely to work, males experience broader labor mobility improvements. Men are more likely to start a new job, become employed in a different industry, and move to a different state in the post‐policy period. Labor mobility improvements are largest among males with household incomes greater than 138% of the federal poverty level, males ages 35 to 49, and males with conditions first diagnosed more than 10 years ago. Last, we show that the policy improved access to health insurance coverage and reduced the likelihood that health impacts the amount or type of work, which ultimately increased labor market flexibility. Our results highlight the heterogenous impacts of the provision on different subgroups of the population.