2017, No. 3

Abstracts of Selected Recent NBER Working Papers

WP 23269
Early Effects of the Affordable Care Act on Health Care Access, Risky Health Behaviors, and Self-Assessed Health
Charles Courtemanche, James Marton, Benjamin Ukert, Aaron Yelowitz, Daniela Zapata

The goal of the Affordable Care Act (ACA) was to achieve nearly universal health insurance coverage through a combination of mandates, sub-sidies, marketplaces, and Medicaid expansions, most of which took effect in 2014. We use data from the Behavioral Risk Factor Surveillance System to examine the impacts of the ACA on health care access, risky health behaviors, and self-assessed health after two years. We estimate difference-in-difference-in-differences models that exploit variation in treatment intensity from state participation in the Medicaid expansion and pre-ACA uninsured rates. Results suggest that the ACA led to sizeable improvements in access to health care in both Medicaid expansion and non-expansion states, with the gains being larger in expansion states along some dimensions. No statistically significant effects on risky behaviors or self-assessed health emerge for the full sample. However, we find some evidence that the ACA improved self-assessed health among older non-elderly adults, particularly in expansion states.

WP 23271
Adaptation and the Mortality Effects of Temperature Across U.S. Climate Regions
Garth Heutel, Nolan H. Miller, David Molitor

We study heterogeneity in the relationship between temperature and mortality across U.S. climate regions and its implica-tions for climate adaptation. Using exogenous variation in temperature and data on all elderly Medicare beneficiaries from 1992–2011, we show that the mortality effect of hot days is much larger in cool ZIP codes than in warm ones and that the op-posite is true for cold days. We attribute this heterogeneity to historical climate adaptation. As one adaptive mechanism, air conditioning penetration explains nearly all of the regional heterogeneity in heat-driven morality but not cold-driven mortality. Combining these results with projected changes in local temperature distributions by the end of the century, we show that failure to incorporate climate heterogeneity in temperature effects can lead to mortality predictions that are wrong in sign for both cool and warm climates. Allowing regions to adapt to future climate according to the degree of climate adaptation currently observed across climates yields mortality impacts of climate change that are much lower than those estimated without allowing for adaptation, and possibly even negative.

WP 23297
Seeing and Hearing: The Impacts of New York City's Universal Pre-Kindergarten Program on the Health of Low-Income Children
Kai Hong, Kacie Dragan, Sherry Glied

Prior research suggests that high quality universal pre-kindergarten (UPK) programs can generate lifetime benefits, but the mechanisms generating these effects are not well understood. In 2014, New York City made all 4-year-old children eligible for high-quality UPK programs that emphasized developmental screening. We examine the effect of this program on the health and healthcare utilization of children enrolled in Medicaid using a difference-in-regression discontinuity design that exploits both the introduction of UPK and the fixed age cut-off for enrollment. The introduction of UPK increased the probability that a child was diagnosed with asthma or with vision problems, received treatment for hearing or vision problems, or received a screening during the pre-kindergarten year. UPK accelerated the timing of diagnoses of vision problems. We do not find any increases in injuries, infectious diseases, or overall utilization. These effects are not offset by lower screening rates in the kindergarten year, suggesting that one mechanism through which UPK might generate benefits is that it accelerates the rate at which children are identified with conditions that could potentially delay learning and cause behavioral problems. We do not find significant effects of having a child who was eligible for UPK on mothers' health, fertility, or healthcare utilization.

WP 23342
The Effect of Public Insurance Expansions on Substance Use Disorder Treatment: Evidence from the Affordable Care Act
Johanna Catherine Maclean, Brendan Saloner

We examine the early effects of U.S. state Medicaid expansions under the Affordable Care Act (ACA) on substance use disorder (SUD) treatment utilization. We couple administrative data on admissions to specialty SUD treatment and prescriptions for medications used to treat SUDs in outpatient settings with a differences-in-differences design. We find no evidence that admissions to specialty treatment changed in expanding states relative to non-expanding states. However, post expansion, Medicaid-reimbursed prescriptions for medications used to treat SUDs in outpatient settings increased by 33 percent in expanding states relative to non-expanding states. Among patients admitted to specialty SUD treatment, we find that in expanding states Medicaid insurance and use of Medicaid to pay for treatment increased by 58 percent and 57 percent following the expansion. In an extension to the main analyses we find no evidence that the expansions affected fatal alcohol poisonings or drug-related overdoses. Overall, our findings provide evidence on the early effects of the ACA on SUD treatment utilization with the newly-eligible Medicaid population.

WP 23353
Cost of Service Regulation in U.S. Health Care: Minimum Medical Loss Ratios
Steve Cicala, Ethan M.J. Lieber, Victoria Marone

A health insurer's Medical Loss Ratio (MLR) is the share of premiums spent on medical claims. The Affordable Care Act introduced minimum MLR provisions for all health insurance sold in fully-insured commercial markets, thereby capping insurer profit margins, but not levels. While intended to reduce premiums, we show this rule creates incentives analogous to cost of service regulation. Using variation created by the rule's introduction as a natural experiment, we find claims costs rose nearly one-for-one with distance below the regulatory threshold: 7 percent in the individual market, and 2 percent in the group market. Premiums were unaffected.

WP 23376
Parental Work Hours and Childhood Obesity: Evidence Using Instrumental Variables Related to Sibling School Eligibility
Charles Courtemanche, Rusty Tchernis, Xilin Zhou

This study exploits plausibly exogenous variation from the youngest sibling's school eligibility to estimate the effects of parental work on the weight outcomes of older children in the household. Data come from the 1979 cohort of the National Longitudinal Survey of Youth linked to the Child and Young Adult Supplement. We first show that mothers' work hours increase gradually as the age of the youngest child rises, whereas mothers' spouses' work hours exhibit a discontinuous jump at kindergarten eligibility. Leveraging these insights, we develop an instrumental variables model that shows that parents' work hours lead to larger increases in children's BMI z-scores and probabilities of being overweight and obese than those identified in previous studies. We find no evidence that the impacts of maternal and paternal work are different. Subsample analyses find that the effects are concentrated among advantaged households, as measured by an index involving education, race, and mother's marital status.

WP 23388
The Effects of Health Insurance Parity Laws for Substance Use Disorder Treatment on Traffic Fatalities: Evidence of Unintended Benefits
Ioana Popovici, Johanna Catherine Maclean, Michael T. French

Each year, 10,000 individuals die in alcohol-impaired traffic accidents in the United States, while psychoactive drugs are involved in 20 percent of all fatal traffic accidents. We investigate whether state parity laws for substance use disorder (SUD) treatment have the unintended benefit of reducing fatal traffic accidents. Parity laws compel insurers to cover SUD treatment in private insurance markets, thereby reducing the financial costs of and increasing access to treatment for beneficiaries. We employ over 20 years of administrative data from the national Fatal Accident Reporting System coupled with a differences-in-differences research design to investigate the potential spillover effects of parity laws to traffic safety. Our findings indicate that passage of a state parity law reduces fatal traffic accident rates by 4.1 to 5.4 percent. These findings suggest that government regulations requiring insurers to cover SUD treatment can significantly improve traffic safety, possibly by reducing the number of impaired drivers on roadways.

WP 23450
The Effect of Insurance Expansions on Smoking Cessation Medication Use: Evidence from Recent Medicaid Expansions
Johanna Catherine Maclean, Michael F. Pesko, Steven C. Hill

In this study we explore the early effects of recent Medicaid expansions on prescriptions and Medicaid payments for evidence-based smoking cessation prescription medications: Zyban, Chantix, and Nicotrol. We estimate differences-in-differences models using data on the universe of prescription medications sold in retail and online pharmacies for which Medicaid was a third-party payer. Our findings suggest that expansions increased prescriptions for smoking cessation medications by 36 percent and total payments for these medications increased by 28 percent. We provide evidence these payments were financed by state Medicaid programs and not patients themselves. Overall our findings suggest that the recent Medicaid expansions allowed low-income smokers to access effective cessation medications.

WP 23466
Disability Benefits, Consumption Insurance, and Household Labor Supply
David Autor, Andreas Ravndal Kostol, Magne Mogstad, Bradley Setzler

While a mature literature finds that Disability Insurance (DI) receipt discourages work, the welfare implications of these findings depend on two rarely studied economic quantities: the full cost of DI allowances to taxpayers, summing over DI transfer payments, benefit substitution to or from other transfer programs, and induced changes in tax receipts; and the value that individuals and families place on receiving benefits in the event of disability. We comprehensively assess these missing margins in the context of Norway's DI system, drawing on two strengths of the Norwegian environment. First, Norwegian register data allow us to characterize the household impacts and fiscal costs of disability receipt by linking employment, taxation, benefits receipt, and assets at the person and household level. Second, random assignment of DI applicants to Norwegian judges who differ systematically in their leniency allows us to recover the causal effects of DI allowance on individuals at the margin of program entry. Accounting for the total effect of DI allowances on both household labor supply and net payments across all public transfer programs substantially alters our picture of the consumption benefits and fiscal costs of disability receipt. While DI allowance causes a significant increase in household income and consumption on average, it has little impact on income or consumption of married applicants because spousal earnings responses (via the added worker effect) and benefit substitution entirely offset DI benefit payments among those who are allowed relative to those who are denied. To develop the welfare implications of these findings, we estimate a dynamic model of household behavior that translates employment, reapplication, and savings decisions into revealed preferences for leisure and consumption. We find that household valuation of receipt of DI benefits is considerably greater for single and unmarried individuals than for married couples because spousal labor supply substantially buffers household income and consumption in the event of DI denial.

WP 23472
Who Is Screened Out? Application Costs and the Targeting of Disability Programs
Manasi Deshpande, Yue Li

The application process is critical to the targeting of disability programs because disability, relative to other tags, is difficult to observe and costly to verify. We study the effect of application costs on the targeting of disability programs using the closings of Social Security Administration field offices, which provide assistance with filing disability applications. Using administrative data from the Social Security Administration, we find that field office closings lead to large and persistent reductions in the number of disability recipients and reduce targeting efficiency based on current eligibility standards. The number of disability recipients declines by 13 percent in surrounding areas, with the largest effects for applicants with moderately severe conditions, low education levels, and low pre-application earnings. Evidence on channels suggests that most of the reduction in applications is attributable to increased congestion at neighboring offices rather than increased travel times or costs of information gathering.

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