The Rise and Fall (and Rise) of the ACA: Varying Coverage Impacts Over Time and Place

• In Event: Federalism in Practice: State Policy Discretion and Coverage and Market Outcomes in the ACA

Abstract

Introduction/Background: The Affordable Care Act represents the most significant expansion of health insurance coverage in the United States since the creation of Medicare and Medicaid. Crucially, the ACA granted states substantial discretion over key implementation decisions — whether to expand Medicaid and whether to operate a state-based Marketplace — creating meaningful variation in how the law operates across state lines.
Purpose/Research Question: This paper asks how the ACA's coverage impacts have varied across presidential administrations and across states with different implementation approaches. Specifically, it seeks to disentangle the contributions of Medicaid expansion, original Marketplace subsidies, and the enhanced subsidies enacted under the American Rescue Plan of 2021 (and later the Inflation Reduction Act of 2022), and to assess how federal and state implementation decisions — particularly the choice to operate a state-based versus federally facilitated Marketplace — have amplified or dampened the effectiveness of each.
Data: We draw on national household survey data spanning 2013 to 2023 from the American Community Survey, providing a decade-long window that captures coverage changes across three presidential administrations. The data support disaggregation by time, geography, and income, enabling us to isolate the effects of specific ACA components across distinct populations and to compare outcomes across states with meaningfully different implementation choices.
Research Design and Methods: We employ a triple-difference design that leverages variation across time, place, and income to identify the causal coverage impacts of the ACA's key components. This approach allows us to separate the effects of Medicaid expansion, original Marketplace subsidies, and ARP enhancements while accounting for confounding factors, and critically, to estimate how the effectiveness of those components varies across different state policy environments and administrative contexts.
Results/Findings: Approximately half of ACA-attributable coverage gains between 2013 and 2023 came from Marketplace subsidies — roughly 40 percent from the original ACA subsidies and 10 percent from ARP enhancements — while the remaining half stemmed from Medicaid, including the welcome mat effect. Coverage gains varied meaningfully across presidential administrations, with Marketplace subsidies proving substantially more effective under Presidents Obama and Biden than under President Trump (during his first term). Most strikingly, state policy choices emerge as a powerful moderator of subsidy effectiveness: the same subsidy amount was more than twice as effective in states operating their own state-based Marketplaces compared to states relying on the federal platform — a finding that holds independent of state political ideology, pointing to administrative infrastructure rather than political will as the operative mechanism.
Conclusion/Implications: In essence, our results show that the explicit economic features of the ACA — eligibility levels and subsidy amounts — have large effects on coverage, as expected, but these effects are mediated through important differences in implementation. While our findings show that the ACA has proven to be a remarkably resilient law, with durable coverage gains even under leadership hostile to its goals, the benefits of the law vary — pointing to the importance of not just the letter of the law but the political climate and the resulting spirit of its implementation to fully understand its effects.

Author

• Gaby Aboulafia, Harvard University
  Presenting Author