The effect of expanding Medicaid eligibility on Supplemental Security Income program participation

Low-income adults without dependent children have historically had few paths to obtain public health insurance unless they qualified for Supplemental Security Income (SSI) cash benefits because of a disability. However, in states that expand their Medicaid programs, childless adults may obtain Medicaid without undergoing an intensive SSI disability review process and with substantially higher income and assets than the SSI program allows. This expanded availability of Medicaid coverage, independent of SSI participation, creates an opportunity to increase earnings and savings without jeopardizing health insurance coverage. In this paper, we use the natural experiments created by state decisions to expand Medicaid to nondisabled, nonelderly adults without dependent children to study the effect of decoupling Medicaid eligibility and cash assistance using a difference-in-differences study design. We collected data on the income eligibility limits, enrollment caps, and coverage characteristics of state Medicaid expansions to childless adults from 2001 to 2013. We combine these data with the nationally representative American Community Survey to estimate the effects of state expansion on SSI participation. We find relative declines in SSI participation of 0.17 percentage points on average after the introduction of Medicaid coverage for childless adults, a 7% relative decrease. This finding suggests the potential for small but important efficiency gains from separating SSI and Medicaid eligibility.