Drawbacks and aftermath of the Affordable Care Act: ex-ante moral hazard and inequalities in health care access

  • Daniele Corso
    Department of Economics and Management, University of Pavia, Italy.


Background: Following the introduction of the Affordable Care Act, various studies have tried to identify the effects of the Reform, without reaching a clear consensus. The aim of this study was to investigate whether expansion of the Medicaid program has led to less inequality in access to health care and to a higher level of ex-ante moral hazard.

Design and Methods:
 The analysis was conducted on two-year longitudinal data (2014-2015) regarding a cohort of 15,898 individuals from a Medical Expenditure Panel Survey (MEPS). After a data cleaning procedure, a sample of 9,255 individuals was selected for the inequality part of the study and 2,307 for the ex-ante moral hazard analysis. Propensity score matching with nearest-neighbour and kernel matching algorithms, difference-in-difference models and concentration index, corrected according to Erreygers methodology, were adopted.

 The analysis showed that disparities were reduced between social classes although the ex-ante moral hazard is a real problem with the Affordable Care Act since individuals covered by public insurance tended to abuse the public service. Among those who benefited from the Act, a reduction in preventive behaviours was observed: there was an increase in smoking and a decrease in level of physical activityAs far as concerns access to health care, there was a decrease in inequality in emergency visits, inability to get care and getting care when needed among beneficiaries of the Reform.

This study demonstrates that the extension of Medicaid has had a dual effect of reducing disparities in access to health care but, at the same time, it seems to have induced people to take less care of themselves.


Stanciole AE. Health insurance and lifestyle choices: identifying ex ante moral hazard in the US market. Geneva Pap Risk Insur Issues Pract 2008;33:627-44. DOI: https://doi.org/10.1057/gpp.2008.27

Zweifel P, Manning WG. Moral hazard and consumer incentives in health care. In: AJ Culyer, JP Newhouse, Editors. Handbook of Health Economics, vol. 1. Part A. Elsevier; 2000. p. 409-459. DOI: https://doi.org/10.1016/S1574-0064(00)80167-5

Assaf S, Campostrini S, Gotway Crawford C, et al. Analyzing disparities trends for health care insurance coverage among non-elderly adults in the US: Evidence from the Behavioral Risk Factor Surveillance System, 1993-2009. Eur J Health Econ 2017;18:387-98. DOI: https://doi.org/10.1007/s10198-016-0806-1

Han X, Nguyen BT, Drope J, Jemal A. Health-related outcomes among the poor: Medicaid expansion vs. non-expansion states. PloS One 2015;10:e0144429. DOI: https://doi.org/10.1371/journal.pone.0144429

Kino S, Kawachi I. The impact of ACA Medicaid expansion on socioeconomic inequality in health care services utilization. PloS One 2018;13:e0209935. DOI: https://doi.org/10.1371/journal.pone.0209935

Seo V, Baggett TP, Thorndike AN, et al. Access to care among Medicaid and uninsured patients in community health centers after the Affordable Care Act. BMC Health Services Res 2019;19:291. DOI: https://doi.org/10.1186/s12913-019-4124-z

Spenkuch JL. Moral hazard and selection among the poor: evidence from a randomized experiment. J Health Econ 2012;3:72-85. DOI: https://doi.org/10.1016/j.jhealeco.2011.12.004

Cotti C, Nesson E, Tefft N. Impacts of the ACA Medicaid expansion on health behaviors: evidence from household panel data. Health Econ 2019;28:219-44. DOI: https://doi.org/10.1002/hec.3838

Courtemanche C, Marton J, Ukert B, et al. Early impacts of the Affordable Care Act on health insurance coverage in Medicaid expansion and non‐expansion states. J Policy Anal Manage 2017;36:178-210. DOI: https://doi.org/10.1002/pam.21961

Dave D, Kaestner R. Health insurance and ex ante moral hazard: evidence from the Medicare, NBER Working Paper 12764. Washington: NBER; 2006. DOI: https://doi.org/10.3386/w12764

Sommers BD, Blendon RJ, Orav EJ, Epstein AM. Changes in utilization and health among low-income adults after Medicaid expansion or expanded private insurance. JAMA Intern Med 2016;176:1501-9. DOI: https://doi.org/10.1001/jamainternmed.2016.4419

Simon K, Soni A, Cawley J. The impact of health insurance on preventive care and health behaviors: evidence from the first two years of the ACA Medicaid expansions. J Policy Anal Manage 2017;36:390-417. DOI: https://doi.org/10.1002/pam.21972

Finkelstein A, Taubman S, Wright B, et al. The Oregon health insurance experiment: evidence from the first year. Q J Econ 2012;127:1057-106. DOI: https://doi.org/10.1093/qje/qjs020

Baicker K, Taubman SL, Allen HL, et al. The Oregon experiment – effects of Medicaid on clinical outcomes. N Engl J Med 2013;368:1713-22. DOI: https://doi.org/10.1056/NEJMsa1212321

Armstrong M, Brown S, Smith H. Benchmarking and threshold standards in higher education. Abingdon-on-Thames: Routledge; 2014. DOI: https://doi.org/10.4324/9781315042244

Scharfstein DO, Rotnitzky A, Robins JM. Adjusting for nonignorable drop-out using semiparametric nonresponse models. J Am Stat Assoc1999;94:1096-120. DOI: https://doi.org/10.1080/01621459.1999.10473862

Leuven E, Sianesi B. PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing. Boston: Boston College Department of Economics; 2003.

Garrido MM, Kelley AS, Paris J, et al. Methods for constructing and assessing propensity scores. Health Serv Res 2014;49:1701-20. DOI: https://doi.org/10.1111/1475-6773.12182

Cochran W, Rubin DB. Controlling bias in observational studies: a review. Sankyha 1973;35:417-46.

Heckman JJ, Ichimura H, Todd PE. Matching as an Econometric Evaluation Estimator. Rev Econ Stud 1998;65;261-94. DOI: https://doi.org/10.1111/1467-937X.00044

Rosenbaum PR, Rubin DB. The central role of the propensity score in observational studies for causal effects. Biometrika 19836;70:41-55. DOI: https://doi.org/10.1093/biomet/70.1.41

Bertrand M, Duflo E, Mullainathan S. How much should we trust differences-in-differences estimates? Q J Econ2004;119: 249-75. DOI: https://doi.org/10.1162/003355304772839588

Lechner M. The estimation of causal effects by difference-in-difference methods. Foundations and Trends® in Econometrics 2011;4:165-224. DOI: https://doi.org/10.1561/0800000014

Dimick JB, Ryan AM. Methods for evaluating changes in health care policy: the difference-in-differences approach. JAMA 2014;312:2401-2. DOI: https://doi.org/10.1001/jama.2014.16153

Koolman X, Van Doorslaer E. On the interpretation of a concentration index of inequality. Health Econ 2004;13:649-56. DOI: https://doi.org/10.1002/hec.884

Wagstaff A, Van Doorslaer E, Paci P. Horizontal equity in the delivery of health care. J Health Econ 1991;10:251-6. DOI: https://doi.org/10.1016/0167-6296(91)90009-C

Erreygers G. Correcting the concentration index. J Health Econ 2009;28:504-15. DOI: https://doi.org/10.1016/j.jhealeco.2008.02.003

Di Novi C, Piacenza M, Robone S, Turati G. How does fiscal decentralization affect within-regional disparities in wellbeing? Evidence from health inequalities in Italy. Ca’ Foscari University Working paper 21/WP/2015. 2015. Available from: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2625503 DOI: https://doi.org/10.2139/ssrn.2625503

Blau FD, Kahn LM. The US gender pay gap in the 1990s: Slowing convergence. ILR Review 2006;60:45-66. DOI: https://doi.org/10.1177/001979390606000103

Angelov N, Johansson P, Lindahl E. Parenthood and the gender gap in pay. J Labor Econ 2016;34:545-79. DOI: https://doi.org/10.1086/684851

Landau J, Arthur MB. The relationship of marital status, spouse’s career status, and gender to salary level. Sex Roles 1992;27:665-81. DOI: https://doi.org/10.1007/BF02651096

Toutkoushian RK, Bellas ML, Moore JV. The interaction effects of gender, race, and marital status on faculty salaries. J High Educ 2007;78:572-601. DOI: https://doi.org/10.1353/jhe.2007.0031

Moran S, Wechsler H, Rigotti NA. Social smoking among US college students. Pediatrics 2004;114:1028-34. DOI: https://doi.org/10.1542/peds.2003-0558-L

Kassel JD, Stroud LR, Paronis CA. Smoking, stress, and negative affect: correlation, causation, and context across stages of smoking. Psychol Bull 2003;129:270. DOI: https://doi.org/10.1037/0033-2909.129.2.270

Cossrow N, Falkner B. Race/ethnic issues in obesity and obesity-related comorbidities. J Clin Endocrinol Metab 2004;89:2590-4. DOI: https://doi.org/10.1210/jc.2004-0339

Giga S, Hoel H, Lewis D. A review of Black and minority ethnic (BME) employee experiences of workplace bullying. Dignity at Work Partnership. 2008. Research Commissioned by the Dignity at Work Partnership: A Partnership Project Funded Jointly by Unite the Union and the Department for Business, Enterprise and Regulatory Reform.

Egli T, Bland HW, Melton BF, Czech DR. Influence of age, sex, and race on college students’ exercise motivation of physical activity. J Am Coll Health 2011;59:399-406. DOI: https://doi.org/10.1080/07448481.2010.513074

Feinstein L, Sabates R, Anderson TM, et al. What are the effects of education on health? In: Proceedings of the Copenhagen Symposium “Measuring the effects of education on health and civic engagement”, Chapeter 4. OECD; 2006.

Fonseca R, Michaud PC, Zheng Y. The effect of education on health: evidence from national compulsory schooling reforms. SERIEs 2020;11:83-103.1-21. DOI: https://doi.org/10.1007/s13209-019-0201-0

Garthwaite CL. The doctor might see you now: The supply side effects of public health insurance expansions. Am Econ J-Econ Pol 2012;4:190-215. DOI: https://doi.org/10.1257/pol.4.3.190