Medicaid-Ing Coverage Volatility for Displaced Workers: Evidence from the 2019 Virginia Medicaid Expansion

Abstract

Using novel administrative tax data, we study the effect of the ACA’s Medicaid expansion on health insurance coverage dynamics for over 1.6 million displaced workers. Leveraging Virginia’s Medicaid expansion, we estimate a 190% increase in Medicaid as first coverage source following job loss. We also find that the expansion immediately and persistently increased the likelihood of coverage and reduced the duration of uninsurance for displaced workers. Additionally, our findings suggest that the expansion influenced labor search dynamics, enhancing job match quality, particularly among those that camefrom the lower half of earnings.

Keywords: Health Insurance Dynamics, Unemployment, Medicaid Expansion