Effects of Medicaid Coverage on Work: Evidence From Extending Postpartum Medicaid Coverage.

Abstract

Objective: To evaluate the effects of the Family First Coronavirus Response Act (FFCRA) on work outcomes of women for whom the FFCRA effectively expanded income eligibility for Medicaid beyond 60 days postpartum by prohibiting states from redetermining Medicaid eligibility between March 2020 and March 2023.

Study setting and design: We use a difference-in-differences design that leverages the differences in income eligibility between pregnancy and non-pregnancy across states, and compares outcome changes pre-post FFCRA over these differences.

Data sources and analytic sample: Data come from the 2016-2022 American Community Survey. The sample includes 205,104 women aged 19-49 years who reported giving birth within the past 12 months in 41 states and Washington D.C.

Principal findings: On average, the FFCRA increased postpartum Medicaid coverage by 2.8 percentage points (95% CI: 0.7-4.8) or by 9.3% relative to the 2019 Medicaid coverage rate. In contrast, the FFCRA effects on work outcomes were small and not significant: the average effect was 0.10 percentage points for labor force participation (95% CI: -1.0 to 1.2), 0.7 percentage points for employment (95% CI: -0.02 to 1.4), 0.04 h for weekly work hours (95% CI: -0.4 to 0.5), and 0.2 percentage points for full-time employment (95% CI: -1.1 to 1.5). These confidence intervals rule out an employment decline above 0.02 percentage points and full-time employment decline above 1.1 percentage points. The increase in Medicaid coverage is concentrated among states with a larger difference between pregnancy and non-pregnancy eligibility (+5.9 percentage points; 95% CI: 0.9 to 10.9) and estimates in this group also rule out relatively small declines in work outcomes.

Conclusion: There is no evidence of declines in work outcomes following the increase in Medicaid coverage beyond 60 days postpartum that resulted from the FFCRA. The findings suggest that subsequent postpartum Medicaid coverage extensions for 12 months under the American Rescue Plan are unlikely to disincentivize work among beneficiaries.