Dr. Prabal K. De is a Professor of Economics in the Colin Powell School at the City College and a doctoral faculty at the Graduate Center of the City University of New York. His recent research focuses on access, outcome, and disparities in health and education. His work has been funded by National Cancer Institute and the Murphy Institute, among others. Previously, he was a short-term consultant with the World Bank Group in Washington, DC. He holds a Ph.D. in Economics from New York University.

Title: Ex-post Moral Hazard in Health Insurance – Evidence from Medicaid Expansions.

Abstract: Using restricted data from the Medical Expenditure Panel Survey (MEPS), I examine the effects of Medicaid expansion as part of the Affordable Care Act on the number and type of medical care visits. Although the Medicaid program has been instrumental in providing insurance to large groups of low-income populations, the program remains open to ex-post moral hazard behavior. The existing evidence, mostly limited to specific states, suggests that such behavior exists. I analyze national data using a quasi-experimental difference-in-differences regression model to estimate changes in outcomes among relevant individuals residing in expansion versus non-expansion states before and after the implementation of the ACA Medicaid expansions. I find only partial evidence of ex-post moral hazard behavior. The expansion positively and significantly impacts office visits on both intensive and extensive margins. However, the effects on hospitalization and ER visits are insignificant. Finally, the results are different for individuals with pre-existing conditions. There is no increase in usual care (office or outpatient visits) but statistically significant decreases in ER visits.

Prabal De’s paper can be found here.