Medicaid expansions for the working age disabled: Revisiting the crowd-out of private health insurance

Disabled individuals under 65 years old account for 15% of Medicaid recipients but half of all Medicaid spending. Despite their large cost, few studies have investigated the effects of Medicaid expansions for disabled individuals on insurance coverage and crowd-out of private insurance. Using an eligibility expansion that allowed states to provide Medicaid to disabled individuals with incomes less than 100% of the federal poverty level, I address these issues. Crowd-out estimates range from 49% using an ordinary least squares procedure to 100% using two-stage least-squares analysis. This potentially large degree of crowd-out could have fiscal implications for the Affordable Care Act which has greatly expanded Medicaid eligibility in 2014.