Poster #122 - The Impact of the Dependent Coverage Mandate on Supplemental Security Income Participation

• In Event: Saturday Poster Luncheon

Abstract

This paper investigates how private health insurance and disability program participation are interconnected by examining how the Affordable Care Act's Dependent Coverage Mandate (DCM) impacted Supplemental Security Income (SSI) participation. The DCM allowed young adults to remain on their parents' health insurance until age 26, reducing the incentive for full-time employment and increasing access to medical diagnoses. As SSI has strict income limits and sufficient medical documentation is needed for qualification, the DCM may have made SSI both more attractive and easier to successfully obtain. Using American Community Survey (ACS) data from 2005–2013 and a difference-in-differences framework comparing adults age 19 to 25 to those age 27 to 29, I find that the DCM increased SSI participation by about 9 percent for young adults, with effects concentrated among those reporting a disability. Among young adults reporting a disability, the likelihood of employment decreased by 2.7 percentage points while the share earning below SSI's substantial gainful activity threshold increased by 3.8 percentage points. These findings are consistent with a reduction in labor supply as a primary mechanism. Supplemental analysis using the Behavioral Risk Factor Surveillance System (BRFSS) shows the DCM reduced financial barriers to care and increased access to primary care providers, supporting a secondary channel in increased medical documentation. Results are robust to alternative specifications, and event study analysis confirms parallel pre-trends in the years prior to the mandate. Back-of-envelope calculations suggest these effects translate to approximately $300 million in additional annual SSI expenditures. These findings demonstrate that health insurance expansions can generate economically meaningful unintended spillovers into disability programs through perhaps both labor supply incentives and improved ability to obtain medical documentation. As health care reforms continue to be discussed, understanding the interconnectivity of public programs is important for fiscal considerations and policy cost projections that accurately capture cross-program spillovers.

Author

• Bryce J Stanley, University of North Carolina Wilmington
  Presenting Author