Effect of Losing Public Health Insurance on Self-Reported Mental Health

Aipoh, Godwin (2025): Effect of Losing Public Health Insurance on Self-Reported Mental Health.

Abstract

Much is known about gaining health insurance, but little is known about losing it. This study investigates how losing public health insurance impacts mental health, using Tennessee’s 2005 TennCare disenrollment as a natural experiment. When the state abruptly cut Medicaid coverage for nearly 200,000 low-income, childless adults, it created a rare opportunity to examine the effects of coverage loss at scale. Drawing on individual-level data from the Behavioral Risk Factor Surveillance System (BRFSS) between 2000 and 2010, I apply a difference-in-differences approach, comparing trends in Tennessee to 38 control states that maintained stable Medicaid eligibility rules. The analysis finds that losing coverage led to a significant 17.5 percentage point increase in poor mental health, a nearly 80% rise relative to baseline. The effects were most severe among women, older adults, the unemployed, and those without a college degree. Mechanism analyses show that coverage loss reduced insurance rates, increased cost-related barriers to care, and decreased preventive service use. This study offers the first causal evidence linking large-scale public insurance loss to worsening mental health and highlights important implications for health policy and Medicaid program.

• Item Type: MPRA Paper
• Language: English
• Keywords: Insurance, Access to care, BRFSS, Health coverage loss, Health inequities, Health policy, Medicaid disenrollment, Mental health, Public health insurance, Tennessee, TennCare
• Subjects: H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health; I - Health, Education, and Welfare > I1 - Health > I11 - Analysis of Health Care Markets; I - Health, Education, and Welfare > I1 - Health > I12 - Health Behavior; I - Health, Education, and Welfare > I1 - Health > I13 - Health Insurance, Public and Private; I - Health, Education, and Welfare > I1 - Health > I14 - Health and Inequality; I - Health, Education, and Welfare > I1 - Health > I15 - Health and Economic Development; I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy ; Regulation ; Public Health; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I38 - Government Policy ; Provision and Effects of Welfare Programs

References

Ahuja, Manik, Johanna Cimilluca, Jessica Stamey, Riddhi P Doshi, Rajvi J Wani, Kawther Al-Ksir, Esther E Adebayo-Abikoye, Aparna Karki, Eugene N Annor, and Chisom M Nwaneki, “Association between Financial Barriers to Health�care Access and Mental Health Outcomes in Tennessee,” Southern medical journal, 2023, 116 (2), 176–180. Alshammaa, Hasan I, Rania H Al-Taie, Abdallah M Mujbel, and Abdal�lah M Mujbel Sr, “Impact of Long-Term Depression on Employment Outcomes: A Systematic Review and Case Series From Iraq on Career Trajectory and Job Stability,” Cureus, 2024, 16 (10). American Psychological Association, “Substance-Use Disorders and Serious Mental Illness,” Monitor on Psychology, June 2024 issue June 2024. Argys, Laura M, Andrew Friedson, M Melinda Pitts, and Daniel Tello-Trillo, “Losing public health insurance: Tenncare disenrollment and personal financial distress,” 2017. , Andrew I Friedson, M Melinda Pitts, and D Sebastian Tello-Trillo, “Losing public health insurance: TennCare reform and personal financial distress,” Journal of Public Economics, 2020, 187, 104202. Baicker, Katherine, Sarah L Taubman, Heidi L Allen, Mira Bernstein, Jonathan H Gruber, Joseph P Newhouse, Eric C Schneider, Bill J Wright, Alan M Zaslavsky, and Amy N Finkelstein, “The Oregon experiment—effects of Medicaid on clinical outcomes,” New England Journal of Medicine, 2013, 368 (18), 1713– 1722. 28 Blunt, Elson Oshman, Johanna Catherine Maclean, Ioana Popovici, and Steven C Marcus, “Public insurance expansions and mental health care availability,” Health Services Research, 2020, 55 (4), 615–625. Campbell, Desmond, Michael James Green, Neil Davies, Evangelia Demou, Laura D Howe, Sean Harrison, Daniel J Smith, David M Howard, Andrew M McIntosh, Marcus Munaf`o et al., “Effects of depression on employment and social outcomes: a Mendelian randomisation study,” J Epidemiol Community Health, 2022, 76 (6), 563–571. DeLeire, Thomas, “The Effect of Disenrollment from Medicaid on Employment, Insurance Coverage, and Health and Health Care Utilization,” in “Health and Labor Markets,” Emerald Publishing Limited, 2019, pp. 155–194. Einav, Liran and Amy Finkelstein, “The risk of losing health insurance in the United States is large, and remained so after the Affordable Care Act,” Proceedings of the National Academy of Sciences, 2023, 120 (18), e2222100120. Farrar, Ione, David Eichenthal, Benjamin Coleman, and Chad Reese, “TennCare reform, one year later,” Robert Wood Johnson Foundation, 2007. Gandhi, Subi, Ryan Glaman, Elizabeth Wachira, Muna Bashir, Sushma Sharma, Chelsea Mowles, and Jasmine Luttrell, “Mental health, chronic disease, and sub�stance use: findings from rural Texas,” Journal of Social, Behavioral, and Health Sciences, 2022, 16 (1), 134–150. Garthwaite, Craig, Tal Gross, and Matthew J Notowidigdo, “Public health insur�ance, labor supply, and employment lock,” The Quarterly Journal of Economics, 2014, 129 (2), 653–696. Graves, John A, Laura A Hatfield, William Blot, Nancy L Keating, and J Michael McWilliams, “Medicaid Expansion Slowed Rates Of Health Decline For Low-Income 29 Adults In Southern States: An analysis of the impact of Medicaid expansion on the self�reported health of low-income older nonelderly adults living in the South.,” Health Affairs, 2020, 39 (1), 67–76. Ham, John C and Ken Ueda, “The employment impact of the provision of public health insurance: A further examination of the effect of the 2005 TennCare contraction,” Journal of Labor Economics, 2021, 39 (S1), S199–S238. Hamersma, Sarah and Jinqi Ye, “The effect of public health insurance expansions on the mental and behavioral health of girls and boys,” Social Science & Medicine, 2021, 280, 113998. Hoopes, Megan J, Heather Angier, Rachel Gold, Steffani R Bailey, Nathalie Huguet, Miguel Marino, and Jennifer E DeVoe, “Utilization of community health centers in Medicaid expansion and nonexpansion states, 2013–2014,” The Journal of am�bulatory care management, 2016, 39 (4), 290–298. J´acome, Elisa, “Mental health and criminal involvement: Evidence from losing medicaid eligibility,” Job Market Paper, Princeton University, 2020. Janke, Alexander T, Shooshan Danagoulian, Arjun K Venkatesh, and Phillip D Levy, “Medicaid expansion and resource utilization in the emergency department,” The American Journal of Emergency Medicine, 2020, 38 (12), 2586–2590. Keisler-Starkey, Katherine, Lisa N Bunch et al., “Health insurance coverage in the United States: 2019,” Washington, DC: US Census Bureau, 2020. Klein, Eili Y, Scott Levin, Matthew F Toerper, Michael D Makowsky, Tim Xu, Gai Cole, and Gabor D Kelen, “The effect of Medicaid expansion on utilization in Maryland emergency departments,” Annals of emergency medicine, 2017, 70 (5), 607–614. Klein, Ezra, “Here’s what the Oregon Medicaid study really said,” 2013. 30 Ku, Leighton and Victoria Wachino, “The Potential Impact of Eliminating TennCare and Reverting to Medicaid: A Preliminary Analysis,” Policy Report, Center on Budget and Policy Priorities November 2004. Lai, Tim C, Cassidi C McDaniel, Chenyu Zou, Dalton Turner, and Chiahung Chou, “Associations between Medicaid expansion and mental health among US racial and ethnic groups,” Psychiatric Services, 2023, 74 (11), 1137–1145. Lee, Jusung, Timothy Callaghan, Marcia Ory, Hongwei Zhao, and Jane N Bolin, “The impact of Medicaid expansion on diabetes management,” Diabetes care, 2020, 43 (5), 1094–1101. Levy, Helen, John Z Ayanian, Thomas C Buchmueller, Donald R Grimes, and Gabriel Ehrlich, “Macroeconomic feedback effects of Medicaid expansion: evidence from Michigan,” Journal of Health Politics, Policy and Law, 2020, 45 (1), 5–48. Maclean, Johanna Catherine, Benjamin Cook, Nicholas Carson, and Michael F Pesko, “Public health insurance and prescription medications for mental illness,” The BE Journal of Economic Analysis & Policy, 2019, 19 (1), 20180067. , Sebastian Tello-Trillo, and Douglas Webber, “Losing insurance and psychiatric hospitalizations,” Journal of Economic Behavior & Organization, 2023, 205, 508–527. Margerison, Claire E, Colleen L MacCallum, Jiajia Chen, Yasamean Zamani�Hank, and Robert Kaestner, “Impacts of Medicaid expansion on health among women of reproductive age,” American journal of preventive medicine, 2020, 58 (1), 1–11. McKinsey & Company, “Achieving a Critical Mission in Difficult Times: TennCare’s Financial Viability,” Part 1 of a 2-part report, McKinsey & Company December 2003. Retrieved April 5, 2005. National Alliance on Mental Illness, “Mental Health by the Numbers,” 2024. 31 National Institute of Mental Health, “Mental Illness,” 2023. National Institutes on Drug Abuse (US), “Common Comorbidities with Substance Use Disorders,” Research Report, National Institutes on Drug Abuse, Bethesda, MD 2020. Onaemo, V. N., B. Chireh, T. O. Fawehinmi, and C. D’Arcy, “Comorbid substance use disorder, major depression, and associated disability in a nationally representative sample,” Journal of Affective Disorders, 2024, 348, 8–16. Rahman, Md Twfiqur, “Effects of Losing Medicaid on Body Weight and Health Behav�iors,” Available at SSRN 4973914, 2024. Richardson, James, Jared Llorens, and Roy Heidelberg, “Medicaid expansion and the Louisiana economy,” Public Administration Institute at Louisiana State University, prepared for the Louisiana Department of Health, 2018. Schlachter, Svenja, Sophia Helen Adam, Maximilian Baxendale, Melanie Gant�ner, Maria Gralla, Florian Junne, Peter Martus, Miriam Mehler, Daniel Nis�chk, Marina Pumptow et al., “Effectiveness of a three-component intervention sup�porting unemployed individuals with mental health issues in their job search and mental health recovery (3for1): study protocol of a non-randomized controlled study,” BMC Pub�lic Health, 2024, 24 (1), 3159. Schwartz, Alan, Julie Goldberg, and Gordon Hazen, “Prospect theory, reference points, and health decisions,” Judgment and Decision Making, 2008, 3 (2), 174–180. Scott, John W, Mark G Shrime, Barclay T Stewart, Saman Arbabi, Eileen M Bulger, Joseph Cuschieri, Ronald V Maier, and Bryce RH Robinson, “Lifting the burden: state Medicaid expansion reduces financial risk for the injured,” Journal of Trauma and Acute Care Surgery, 2020, 88 (1), 51–58. 32 Simon, Kosali, Aparna Soni, and John Cawley, “The impact of health insurance on preventive care and health behaviors: evidence from the first two years of the ACA Medicaid expansions,” Journal of Policy Analysis and Management, 2017, 36 (2), 390–417. Sojourner, Aaron and Ezra Golberstein, “Medicaid expansion reduced unpaid medical debt and increased financial satisfaction,” Health Affairs Forefront, 2017. Tang, Zongwei and Zichen Yang, “The Effect of Public Health Insurance on Mental Health of Middle-aged and Elderly People in China,” in Arman Eshraghi, ed., Proceedings of the 3rd International Conference on Business and Policy Studies, Vol. 106 of Advances in Economics, Management and Political Sciences EWA Publishing July 2024, pp. 54–64. Tello-Trillo, Daniel Sebastian, “Effects of losing public health insurance on preventative care, health, and emergency department use: Evidence from the TennCare disenrollment,” Southern Economic Journal, 2021, 88 (1), 322–366. Walker, Elizabeth Reisinger, Janet R Cummings, Jason M Hockenberry, and Benjamin G Druss, “Insurance status, use of mental health services, and unmet need for mental health care in the United States,” Psychiatric Services, 2015, 66 (6), 578–584. Ward, Brian W and Michael E Martinez, “Health insurance status and psychological distress among US adults aged 18–64 years,” Stress and Health, 2015, 31 (4), 324–335. Winkelman, Tyler NA and Virginia W Chang, “Medicaid expansion, mental health, and access to care among childless adults with and without chronic conditions,” Journal of general internal medicine, 2018, 33, 376–383. Wolters Kluwer, “Losing Medicaid coverage leads to reduced use of healthcare among adults with mental health disorder,” 2023. Wooldridge, Judith, Leighton Ku, Teresa Coughlin, Lisa Dubay, Marilyn Ell�wood, Shruti Rajan, and Sheila Hoag, “Implementing State Health Care Reform: 33 What Have We Learned from the First Year? The First Annual Report of the Evaluation of Health Reform in Five States,” Technical Report, Mathematica Policy Research 1996. World Health Organization, “Constitution of the World Health Organization,” 1948.