Abstract
More than \(18\%\) of US adults meet the diagnostic criteria for a mental illness. Yet, many who could benefit from mental health care do not receive any treatment, primarily due to inability to pay for care or lack of health insurance coverage. How does a change in health insurance coverage affect psychological well-being and mental health? We explore this question using age-based health insurance coverage policies in the United States as natural experiments. We provide evidence that losing health insurance coverage at the age 26 due to aging out from dependent coverage is associated with a statistically significant deterioration in certain mental health indicators and psychological well-being among young adults. On the other hand, we find no evidence of an improvement in mental health or psychological well-being among the elderly at the age 65 due to becoming eligible for Medicare. These results are robust to potential changes in risk-taking behavior and physical health at the same age cutoffs.
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Data availability
The data used in this paper is the Medical Expenditure Panel Survey and publicly available through the Agency for Healthcare Research and Quality.
Notes
Source: Open Minds U.S. Mental Health Market Report (2020).
Before the implementation of the ACA, most insurance companies allowed dependent coverage until the dependent child turns 19. The effects of this age cutoff were also studied in the literature (Yörük 2016)
We also exclude the month that each respondent turns 26 or 65 from the sample (when the forcing variable, i.e., the number of months before or after the 26th or 65th birth months, is equal to 0). This is because the MEPS reports only the month and year (but not day) of birth for each respondent. It is not possible to match the interview dates (that contain day, month, and year) with the exact 26th or 65th birthdate of each respondent. Therefore, it is not possible to pinpoint the treatment status of a respondent for the month that he or she turns 26 or 65.
A person was considered eligible to receive the SAQ if that person did not have a status of deceased or institutionalized, was not a non-response at the time of the Round 2 or Round 4 interview date, did not move out of the US or to a military facility, and was 18 years of age or older.
We use two different sample weights. For health insurance coverage and self-reported mental health outcomes, we use the sample weights as reported in the HC of the MEPS. For the remaining mental health and psychological well-being outcomes, we use the sample weights as reported in the SAQ of the MEPS.
We estimate an alternative donut RD model for which we excluded the observations for six months before the 26th birthday. The results for the alternative model are similar to those from the donut RD model reported in Table 4 and available upon request.
Yörük (2023) finds that young adults become more likely to report that health insurance is not worth the money it costs when they turn 26. We believe that this potential change in attitudes would not have a significant impact on mental health outcomes among young adults. We also expect that the potential effects of attitude changes (if any) would reduce the potential effects of health insurance loss on mental health. This is because people who believe that health insurance is not necessary are probably less likely to be stressed for the possibility of future health issues that may require costly treatments. In this case, our estimates will underestimate the true effect of the policy on mental health rather than overestimate it.
See, for example, Gross (2010), Long et al. (1998), and Chatterji et al. (2021).
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Yörük, B.K., Han, Y. Age-based health insurance coverage policies and mental health. J Popul Econ 37, 42 (2024). https://doi.org/10.1007/s00148-024-01015-w
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DOI: https://doi.org/10.1007/s00148-024-01015-w