Welcome Mats and On‐Ramps for Older Adults: The Impact of the Affordable Care Act's Medicaid Expansions on Dual Enrollment in Medicare and Medicaid

Abstract

For many low‐income Medicare beneficiaries, Medicaid provides important supplemental insurance that covers out‐of‐pocket costs and additional benefits. We examine whether Medicaid participation by low‐income adults age 65 and up increased as a result of Medicaid expansions to working‐age adults under the Affordable Care Act (ACA). Previous literature documents so‐called “welcome mat” effects in other populations but has not explicitly studied older persons dually eligible for Medicare and Medicaid. We extend this literature by estimating models of Medicaid participation among persons age 65 and up using American Community Survey data from 2010 to 2017 and state variation in ACA Medicaid expansions. We find that Medicaid expansions to working‐age adults increased Medicaid participation among low‐income older adults by 1.8 percentage points (4.4 percent). We also find evidence of an “on‐ramp” effect; that is, low‐income Medicare beneficiaries residing in expansion states who were young enough to gain coverage under the 2014 ACA Medicaid expansions before aging into Medicare were 4 percentage points (9.5 percent) more likely to have dual Medicaid coverage relative to similar individuals who either turned 65 before the 2014 expansions or resided in non‐expansion states. This on‐ramp effect is an important mechanism behind welcome mat effects among some older adults.

Medicaid Expansion Spillover Effects on Health Care Consumption and Coverage: Evidence from Medicare Administrative Data

“…Examining expansions of Medicaid and the State Children's Health Insurance Program to parents in the late 1990s and early 2000s along with changes in employer-provided insurance availability, Glied and Hong (2018) find insurance coverage expansions led to lower Medicare spending per beneficiary. This was a similar finding to that of McInerney, Mellor, and Sabik (2017), who study individual-state Medicaid expansions pre-dating the ACA. Both studies, however, present suggestive evidence that the spending crowded out in these cases was low-value care.…”

“…Thus, post-65 beneficiaries could only be affected by the supply-side and downward-sloping-demand effects, while the pre-65 individuals could be influenced by both in addition to intertemporal substitution. Moreover, separating the cohorts this way also allows us to examine changes in Medicaid coverage separately and provide further understanding of the results of McInerney, Mellor, and Sabik (2021), which showed sizable spillovers in coverage (on-ramp effects) for pre-65 beneficiaries, but did not provide separate estimates for post-65 enrollees.…”

The effects of public health insurance on health behaviors: Evidence from the fifth year of Medicaid expansion

“…The two exceptions for the elderly sample include exercise, for which I find a 1.1 percentage point increase ( p < 0.05) and mammogram, for which I find a 1.9 percentage point decrease ( p < 0.01). Recent work has shown that though the ACA Medicaid expansions targeted working‐age adults, they also had some spillover effects on elderly adults dually eligible for Medicare and Medicaid (McInerney, Mellor, & Sabik, 2018). Small increase in insurance coverage may help explain the increase in exercise among elderly adults.…”

Association of Medicaid Expansion Under the Patient Protection and Affordable Care Act With Use of Long-term Care

“…Spillovers may arise from the so-called welcome mat phenomenon, in which, for example, increased publicity about Medicaid and a streamlined application process attract people who were eligible under traditional criteria but who had not enrolled previously and then underwent the eligibility process. 13,14 Other structural changes to the Medicaid program after ACA expansion that targeted potential eligible adults might also have been associated with increased coverage and with increased demand for LTC. For example, the increase in case management as a part of contracts for accountable care organizations could make case managers more aware of Medicaid application processes.…”