How Efficient was the Affordable Care Act at Reducing Uninsured Rates? -- by Anuj Gangopadhyaya, Robert Kaestner

One way to measure the efficiency of the Affordable Care Act (ACA) is the extent to which gains in publicly supported health insurance reduced uninsured rates. Using data from the 2008–2024 American Community Survey, we examine time trends in rates of uninsured, public insurance coverage, and employer-sponsored insurance (ESI) by groups defined by the ratio of income to the Federal Poverty Line (FPL). We obtain estimates of associations between changes in public coverage and changes in uninsured and ESI exploiting state-by-year variation in ACA implementation. Importantly, we estimate the total effect of the ACA—including both the Medicaid expansion and Marketplace coverage—on uninsured and ESI rates. For adults in households below 150% of the federal poverty level (FPL), increases in public insurance coverage were associated with one-for-one decrease in uninsured and no change in ESI. For adults with incomes between 151%–400% FPL, each percentage point increase in public coverage was associated with about a 0.6 percentage point decrease in uninsured and a 0.4 decrease, or crowd out, in ESI. Crowd-out was larger among groups with higher pre-ACA ESI rates such as parents and married adults. Using variation from the Medicaid expansion alone to evaluate the ACA’s effect on ESI leads to overstating crowd-out among low-income adults (below 150% FPL) and understating crowd-out among higher-income adults (above 250% FPL). Our findings suggest that policies intended to subsidize health insurance of higher income groups, for example, the enhanced premium subsidies, are far less efficient than policies intended to further expand public insurance to low-income groups, for example, in non-expansion states.