LAUSR

Eligibility for and enrollment in Medicaid can vary with economic recessions, recoveries, and changes in personal income. Understanding how Medicaid responds to such forces is important to budget analysts and policy makers tasked with forecasting Medicaid enrollment. We simulated eligibility for Medicaid for the period 2005-14 in two scenarios: assuming that each state's eligibility rules in 2009, the year before passage of the Affordable Care Act (ACA), were in place during the entire study period; and assuming that the ACA's expanded eligibility rules were in place during the entire period for all states. Then we correlated the results with unemployment rates as a measure of the economy. Each percentage-point increase in the unemployment rate was associated with an increase in the share of people eligible for Medicaid of 0.32 percentage point under the 2009 eligibility rules and 0.77 percentage point under the ACA rules. Our simulations showed that the ACA expansion increased Medicaid's responsiveness to changes in unemployment. For states that have not expanded Medicaid eligibility, our analysis demonstrates that increased responsiveness to periods of high unemployment is one benefit of expansion.