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HERC Health Economics Seminar

The Effect of Medicaid Expansions on Demand for Care from the Veterans Health Administration


by Austin Frakt, PhD ; Amresh Hanchate, Ph.D. ; Steven Pizer, PhD
Seminar date: 9/17/2014

Description: Through expansions of Medicaid programs and reforms of the individual market, the Affordable Care Act (ACA) increases access to health insurance to millions of Americans, including veterans. Some veterans also have access to care from the Veterans Health Administration (VA), raising the question of what effect the ACA’s coverage expansion will have on demand for VA care. We estimated the historical relationship between Medicaid expansions and enrollment into the VA and use of VA inpatient and outpatient services during 2002-2008, and simulated implications of the ACA. We found that if the ACA’s Medicaid expansion had been implemented in all states in 2008 (the final year of our data), and holding all else constant, enrollment for VA health coverage, acute inpatient care (days), and outpatient visits would have been 11%, 6.5%, and 14% lower, respectively. However, there are other aspects of the ACA—notably its individual coverage requirement, which the VA fulfills—that may serve as countervailing forces. Though our estimates suggest that the Medicaid expansion will reduce demand for VA care, the overall effect of the ACA on VA demand is less clear.

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