Estimates of Direct Purchase from the ACS and Medicaid Misreporting

Estimates of the size of the individual market, often referred to as “direct purchase coverage,” derived from surveys typically exceed counts from administrative records, with particularly high estimates from the American Community Survey (ACS). Are the relatively high estimates of direct purchase coverage in the ACS caused by people misreporting their Medicaid coverage?

While there is a plausible connection between survey error in direct purchase and Medicaid, it is a small connection and does not substantially contribute to the high levels of direct purchase in the ACS. It is informative to rule out Medicaid misreporting as a source for bias in estimates of direct purchase coverage, but the exact mechanism that leads the ACS to over-estimate direct purchase, relative to administrative counts, remains allusive.

Further work is needed to understand the sources of bias in the ACS estimate of direct purchase coverage. This will be an increasingly important problem to solve as the ACS starts to be used for tracking the impact of the Affordable Care Act.