Institute of Labor Economics: 'Medicaid Expansion and Mental Health of Spousal Caregivers'

BONN, Germany, Oct. 5 (TNSRep) -- IZA-Institute of Labor Economics issued the following discussion paper (No. 14754) in September 2021 entitled "Medicaid Expansion and the Mental Health of Spousal Caregivers".

The discussion paper was written by Joan Costa-Font and Nilesh Raut of London School of Economics, and Courtney Van Houtven of Duke University.

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Here are excerpts:

Abstract

Health insurance expansions can exert wellbeing effects on individuals who provide informal care to their loved ones, reducing their experience of depression. This study exploits evidence from the Affordable Care Act's (ACA) Medicaid expansion to examine the effects on the mental wellbeing of informal caregivers. Drawing on an event study and a Difference-in-Differences (DID) design we investigate the policy impact of ACA Medicaid expansion using longitudinal evidence (from the Health and Retirement Study, HRS) for 2010 to 2018 for low-income individuals aged 64 or below. We find that ACA's Medicaid expansion reduced depressive symptoms among caregivers, and specifically we estimate that exposure to ACA Medicaid expansion gives rise to a 0.38 points (equivalent to 4-5%) reduction in the CESD score (a negative scale in which the lowest scale indicates the best mental wellbeing). We also find that ACA Medicaid causes a spillover effect at the household level, improving the well-being of the spouse care recipient. Our results are robust to various specifications, and we identify several potential driving mechanisms for the findings: reductions in out-of-pocket expenses and labor supply and, as expected, increased Medicaid uptake. The evidence from falsification tests confirms that the estimated effects are purely due to ACA's Medicaid expansion and no other phenomena.

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Introduction

In most western countries, care needs of old age individuals with disability are sustained by the duties performed by family caregivers. The informal supply of care by family caregivers reduces the potential of individuals going with unmet needs or being supported by government (Adelman et al, 2014). However, the reliance on an informal system of long-term care comes at the cost of significant wellbeing sacrifices by caregivers. Caregiving spouses exhibit a unique emotional and financial connection to disabled individuals, and for them providing care might results from a strong intergenerational social norm, and hence might not feel optional. The latter calls for potential government policies to protect such caregivers to continue with their caregiving duties. Informal caregiving is only sustainable if caregivers are supported, as caregiving limits the independence of caregivers, as well as their ability to maintain dual roles as caregivers and workers. Reductions in caregivers labor supply (Van Houtven et al 2013; Chairi et al 2015) such as temporary or permanent labor market exit (including early retirement) are common adjustments to cope with caregiving duties. Work reductions also can take place gradually through reducing hours or foregoing promotions, which also reduces caregiver income and financial wellbeing. Impacts of caregiving on work and economic security are especially exacerbated when health insurance benefits are tied to employment. Examining this question will be purpose of this paper.

The wellbeing of caregivers can improve in countries where individuals with limited income generating sources are entitled to health insurance, as the United States (US). In the U.S., aside from low-income individuals who can qualify for public insurance throughout their working years (Medicaid), historically health insurance benefits have come from employment until citizens qualify for public governmental insurance (Medicare) at age 65. Given that health insurance typically is connected to employment decisions, limited employment opportunities can increase the prospect of not having any form of health insurance, thereby increasing exposure to the health and financial risks of ill health (including mental health). Limited health insurance can exert important detrimental consequences to caregiver wellbeing more generally, as it impacts the ability to engage in preventative activities (e.g., flu shots, preventive care, and screenings) and increases the stress associated with their daily duties. If uninsured caregivers delay or forgo needed health care, it may give rise to depressive episodes/1.

Thus, understanding the experiences and mentalhealth wellbeing of low-income caregiver spouses is critical, as there are not ready direct programs and tools to ameliorate consequent negative economic and health consequences of caregiving in the United States.

Health insurance reform in the United States, and more specifically associated Medicaid expansions in 2010 (hereafter called ACA-Medicaid) allows for testing the effect of Medicaid on caregivers wellbeing. Medicaid is the historical public insurance program that serves low-income residents and ACA-Medicaid expansion occurred through increasing the income limits for eligibility, generally to 138% the federal poverty level in states that expanded. In this way the Affordable Care Act (ACA) expanded health coverage for residents, yet the Supreme Court decision of 2012 made such expansion optional, allowing states to decide whether to continue with the Medicaid expansion. Hence, it is possible to exploit state variation in ACA-Medicaid expansion on the wellbeing of spousal caregivers.

Medicaid expansion may affect informal family caregivers who are the backbone of the long term supports and services infrastructure. 19% of Americans are providing unpaid care to an

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1/ Specifically, given that caregivers experience burden, stress and strain at higher rates compared to non-caregivers, lack of health insurance could prevent treatment of consequent mental health conditions such as anxiety and depression.

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adult with health or functional needs and 61% of family caregivers are employed (AARP, 2020). Family caregivers provide substantial cost savings to Medicare and Medicaid, and very limited research has examined the effect of insurance expansions on spousal caregivers wellbeing. Only one papers has examined an effect, but it relies on a proxy measures of caregivers mental health and focuses on quality-of-life measures (Torres et al, 2020) rather than depressive symptoms.

This paper draws on longitudinal data from the Health and Retirement Survey (HRS) including state geographic identifiers to examine the effect of exposure to Medicaid expansion on caregivers wellbeing, and especially the presence of depressive symptoms. We document evidence that suggests that Medicaid expansion reduces depressive symptoms, increases happiness, and that this effect primarily is the case among low wealth individuals who are most likely to gain insurance through the expansion. There is no spillover effect among those who are not eligible for the expanded eligibility, e.g., those 65 and above who are on Medicare. The effect size suggests a reduction of 4-5% in depressive symptoms score (0.38 when measured on the scale 0-8).

The rest of the paper is organized as follows. The next section reports the related literature that overall summarizes the effects expanding caregivers health insurance and other benefits on proxies for caregivers wellbeing. Section three describes the data employed and the empirical strategy followed in this paper. Section four reports the results, fifth section extends the paper, and a final section concludes.

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Conclusion

This paper has examined the effect of the expansion of public insurance (Medicaid) resulting from the introduction of the Affordable Care Act (ACA) to caregivers who previously had limited access to private health insurance (due to low-income and low-benefit work activities and/or limited employment opportunities derived from their caregiving duties). Drawing on evidence from Affordable Care Acts Medicaid expansion; we document evidence of Medicaid expansion effects on the mental health of caregiving souses. We exploit the quasi-experimental change that occurred due to the expansion of Medicaid coverage under ACA. We observe that ACA Medicaid improved the mental wellbeing of careers (we estimate 0.38 points decrease in the CESD scale, which is equivalent to an average 4-5% reduction in CESD score/depressive symptoms). The effects are driven by specific components of the CESD score, mainly happiness, sadness, depression, and loneliness, which were affected due to ACA Medicaid.

These results indicate that availability of health insurance to adult spousal caregivers can significantly reduce the mental burden associated with informal caregiving. These findings offer some answers to the demand of sustainable arrangement for informal caregiving. The ACA Medicaid is observed to benefit spousal caregivers by significantly improving their otherwise deteriorating mental health. We also find that the ACA Medicaid results in spillover at household level by significantly improving the well-being of spouses being cared for. No one has cast ACA Medicaid expansion as a caregiver support policy. However, combined, our results suggest that ACA-Medicaid expansion is in fact an indirect caregiver support policy, improving mental health of both caregivers and spousal care recipients. Therefore, indirect and direct programs supporting the modal providers of long-term care in the United States -- unpaid informal caregivers - could help minimize the negative mental health impacts of caregiving, while supporting the preference of disabled older adults to remain safely in their own homes.

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View full discussion paper at http://ftp.iza.org/dp14754.pdf