Young Children's Mental Health Improves Following Medicaid Expansion to Low-Income Adults

We investigate whether the Affordable Care Act's Medicaid expansion, implemented in 2014, improved the mental health of young children whose parents are in the policy's target population. We study children ages 2 to 3 in families with incomes less than 138% of the federal poverty level. We use restricted National Health Interview Survey data covering the United States from 2010 to 2018 to conduct an event study—a flexible version of difference-in-differences—of the Medicaid expansion's effects on Mental Health Indicator values for young children. We estimate effects using ordered logit regression. Children's mental health was statistically significantly better in Medicaid expansion states, compared with non-expansion states, in 3 of 4 post-expansion years. There were no differences between expansion and non-expansion states in the pre-expansion period, lending support to the causal interpretation that the expansion improved children's mental health. While Medicaid expansion targets low-income adults, our evidence indicates it improves low-income children's mental health. The expansion is a two-generation investment in prevention. It helps lay a foundation for strong mental health in children's early years and beyond.