Abstract
This study evaluates the impact of the Affordable Care Act (ACA) preexisting conditions provision on mental health. The 2014 policy ensured individuals with preexisting health conditions the right to obtain insurance coverage. Using longitudinal data from the Panel Study of Income Dynamics between 2007 and 2017 and estimating difference-in-differences models, our study provides evidence that the policy reduced severe mental distress by 1.44 percentage points (baseline mean: 8.09%) among individuals with preexisting physical health conditions. Exploiting pre-ACA, state-level variation in policies providing insurance coverage options to people with preexisting conditions, we find that this improvement in mental well-being is highly associated with the presence of high-risk pools before 2014, which provided individuals with prior health conditions access to coverage. Specifically, we show that our main results are driven by individuals with preexisting health conditions living in the 16 states that did not have high-risk pools. Furthermore, gender-specific analysis shows that the reduction in mental distress is primarily observable among women. When examining potential mechanisms, our analysis provides evidence that increases in insurance coverage, reductions in healthcare expenditures, and improvements in physical health can explain the positive effects of the provision on mental well-being.
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