How did Medicaid Expansion affect the Provider Labor Market?

One provision of the Affordable Care Act was to expand Medicaid eligibility for a greater number of low-income patients. The resulting increase in demand for care was largely explored, but the effect of the 2014 Medicaid expansion on the physician and advanced practitioner labor market has not been well researched by economists. With the looming shortage of physicians in the US, the question arises: how does the health care system fulfill demand for labor in response to public insurance expansions? Using pooled cross-sectional data from the 2010 - 2018 American Community Surveys, this paper employs a difference-in-differences regression model to determine whether the Medicaid expansion has caused notable changes in physician, physician assistant, and nurse practitioner hours, compensation, and overall employment. This study finds that the weekly hours worked by nurse practitioners increased significantly in states that have implemented Medicaid expansion, whereas physicians and physician assistants saw no change in their hours or earnings. Further, Medicaid expansion led to no significant change in the overall employment of providers in states that implemented the policy. Therefore, to address the current shortage in the supply of physicians and meet demand for care, state policymakers should consider expanding the nurse practitioner's scope of practice and financially incentivizing practices to employ nurse practitioners.