The Politics of Welfare Retrenchment: Evidence from Mass Medicaid Disenrollment in Two States

Abstract

In 2005, Missouri and Tennessee tightened eligibility for their public health insurance programs, resulting in widespread coverage losses. Leveraging county-level variation in subsequent disenrollment, I show that voters in Tennessee punished the incumbent governor for the Medicaid cuts. In Missouri, by contrast, disenrollment had no impact on the subsequent gubernatorial election but did increase support for Democrats in 2006 state legislative elections, possibly due to the strategic entry and exit of candidates. In both states, the loss of Medicaid coverage was associated with lower support for Democratic presidential candidates, although these declines appear part of a longer-term trend that preceded the coverage loss. The results speak to the potential political costs of welfare spending cuts and the electoral consequences of reducing income-targeted social programs.