The effects of the American Rescue Plan Act on racial equity in health insurance coverage

To evaluate the effects on racial disparities in health insurance coverage from the changes in the Premium Tax Credit (PTC) implemented in March 2021 as part of the American Rescue Plan Act (ARPA).

We use nationally representative individual-level data from the Household Pulse Survey (HPS), which provides demographic, economic, and health insurance information for United States residents during the period April 2020-August 2022.

While the PTC changes applied to all states, the 14 states that did not expand Medicaid received substantially more benefits than the expansion states since they had more uninsured individuals eligible for the PTC than the expansion states. In our analysis, the treatment (control) group includes all Medicaid nonexpansion (expansion) states. We use a difference-in-difference regression analysis to estimate the increase in the probability of insurance coverage after the expansion of the PTC. Furthermore, we conduct sensitivity and heterogeneity analyses.

We focus on survey respondents ages 18-64.

The expanded PTC increased the probability of an individual having coverage through the Health Insurance Exchange (HIX) in a nonexpansion state by 0.95 (95% CI: 0.6136, 1.2900), 1.75 (95% CI: 1.1795, 2.3291), and 1.75 (95% CI: 1.1815, 2.3269) percentage points among White, Black, and Hispanic respondents, respectively. It also increased overall health insurance coverage among all groups.

The expanded PTC boosted HIX and overall health insurance coverage and reduced racial disparities.