Spillover between Medicare and Medicaid: Evidence from decreasing physician reimbursements

Abstract

This paper studies the effect of large changes in Medicaid reimbursement rates on the quantity of care supplied to Medicare beneficiaries. In 2015, the payment parity provision of the Affordable Care Act ended, causing widespread decreases in reimbursements to primary care providers for Medicaid services. Difference-in-differences and triple-differences model estimates show that decreasing physician payments for Medicaid caused a small increase in the number of services provided to Medicare beneficiaries. I explore the mechanisms driving this result, giving context and insight into some current puzzles regarding the effects of the ACA's Medicaid expansion.