| 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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