Ten More TV Shows You Need to Watch Right Now

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Investigating the Economic Impacts of Medicaid Expansion in New York City

Author’s Note: This blog post is a summary of my final Policy and Data Studio project for the Master of Science in Public Policy program at NYU Wagner.

Introduction

This blog details my exploratory data analysis of the impacts of Medicaid expansion on Medicaid recipients’ incomes in New York City.

Medicaid expansion was a policy included in the Affordable Care Act to provide more low-wage individuals health insurance. It allowed states to expand eligibility for their Medicaid programs to 138% of the federal poverty level to provide more low-income workers who did not have health insurance through their jobs.[i] New York state was one of the first states to expand the program in January 2014.[ii]

My project was motivated by my internship as a Medicaid expansion advocate at a non-profit Texas. We worked to convince legislators that expanding Medicaid eligibility would help improve the health and wellbeing of low-income workers currently ineligible for Medicaid.

As I spent more time researching, I wondered about the effectiveness of Medicaid expansion as a policy. I read numerous reports and studies about Medicaid expansion’s impact on physical and financial wellbeing. However, I was curious about the policy’s actual economic effects in a place I know well, New York City. I have lived in New York City for more than ten years. I felt I understood the demographics and geography of the city. I also witnessed the changes that have occurred throughout the past decade.

Research Question

From these initial ideas, my broad research question became has expanding Medicaid led to greater financial stability for low-income workers? More specifically, did Medicaid expansion lead to higher incomes for low-wage workers and lower poverty levels in New York City?

Prior economic studies of Medicaid expansion used measures like medical debt and evictions to show financial stability.[iii] Miller and Wherry (2017) found that low-income adults in Medicaid expansion states had reductions in problems with and worries about paying medical debt.[iv]Another study by Hu et al. (2018) found low-income areas of Medicaid expansion states had a decrease in unpaid non-medical bills and non-medical debt sent to debt collectors.[v] Using these studies as a basis for Medicaid expansion increasing financial stability, I wanted to determine if this increased financial stability also led to increased incomes and decreased poverty.

Data Sources

I used two data sources for my project, the American Community Survey by the U.S. Census Bureau and the Census’ Public Use Microdata Area (PUMA) geographic data.[vi] All data was from 2009 through 2019 and was filtered to focus on Medicaid recipients in New York City.

I created a dataset that included all Public Use Microdata Areas to equate roughly to New York City’s Community Districts from the geographic data.

From the American Community Survey data, I created the following variables — adjusted total income, average income, the average percent of the federal poverty level, and percent of the total population using Medicaid.

Analysis & Results

I investigated four main aspects related to the Medicaid population in New York City.

1. Plotting Percent Share of Medicaid Recipients in the Total NYC Population

2. Analysis of Medicaid Recipient Income by Geography

Below are line graphs tracking average income of the Medicaid population across the city and by borough between 2009 and 2019.[viii] There is a significant increase in average incomes for Medicaid recipients city-wide after the 2014 expansion as people with higher incomes became eligible for the program. However, the sustained rise in the average income of Medicaid recipients over the observed period suggests Medicaid expansion could have had some positive influence on incomes.

3. Analysis of Medicaid Recipient Percent of the Federal Poverty Level by Geography

4. Plotting the Medicaid Population by Employment Status

Below is a graph of the New York City Medicaid population by employment status. While the greatest number of Medicaid recipients are not in the labor force, the number of employed Medicaid recipients significantly increased after Medicaid expanded in 2014. More employed Medicaid recipients suggest low-wage workers who became eligible through expansion chose to enroll. It is also possible that some individuals who were unable to work previously due to poor health could now work because they had could afford health care.

The above trends in average income, percent federal poverty level, and employment status suggest Medicaid expansion increased incomes to an extent. The increase in employed Medicaid recipients might also suggest some level of greater financial stability.

Limitations

There is an unclear cause and effect for the rise of incomes among the Medicaid population of New York City. My data did not allow for comparisons within the Medicaid population, e.g., there was no way to determine who among the survey respondents became eligible for Medicaid through the expansion policy. And, because the American Community Survey data is collected throughout the year, a person’s income, Medicaid, and employment status, particularly a low-wage worker’s, fluctuate throughout the year. This inconsistency makes it difficult to determine how much of the effect seen is from the expansion group becoming eligible versus a true increase in income.

Additionally, the data does not separate out the different groups of Medicaid recipients. It includes pregnant people and those receiving Medicaid coverage for a disability, who have higher income thresholds for eligibility, which inevitably biases the average income and percent of the federal poverty level of the Medicaid population included in the survey.

Policy Implications

The significant increase in average income and number of employed Medicaid recipients was the most interesting outcome of my analysis. My analysis does not include data during the COVID-19 pandemic. Although initial studies suggest the overall uninsured rate has not changed much throughout this time, loss of employment and income may have led to a greater number of Medicaid recipients.[ix]

Although my results are not significant enough to create any policy implications at this time, the basic analysis suggests there could be a positive relationship between expanded Medicaid eligibility and income.

The inclusion of a federal coverage expansion option for low-wage Americans in Congress’ next budget reconciliation bill will likely become a very expensive program.[x] Further studies into Medicaid expansion’s impact might be needed to validate such large expenditures.

Next Steps

If I could find more detailed data and take more time for analysis, I would plan to separate the Medicaid population into eligible recipients before expansion and those who became eligible after. I would like to use regression analysis to estimate the income of these two groups while controlling for things like race, sex, and age to create a more comparative study on Medicaid expansion’s impact on income. These steps could provide more insight into the relationship between Medicaid expansion and financial stability for low-income workers.

[iv] Miller, S., and Wherry, L. (2017). Health and Access to Care during the First 2 Years of the ACA Medicaid Expansions. The New England Journal of Medicine, 376(10), 947–956.

[v] Hu, L., et al. (2018). The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Wellbeing. National Bureau of Economic Research, Working Paper 22710.

[viii] Using Medicaid recipients’ total incomes adjusted to 1999 dollars to account for inflation, I calculated average incomes of Medicaid recipients, and then I divided the population by borough and then by neighborhood.

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