Skip to Content

Minimum Wage Cliff Effects: How Does the Rising Minimum Wage Impact Health Insurance Coverage?

The aim of this research is to understand how Colorado's increasing minimum wage may impact health insurance coverage among low-wage workers and their families.

In November 2016, Colorado voters approved a ballot initiative that aims to increase Colorado's minimum wage to $12 an hour by 2020. The motivation for this increase, which will raise state minimum wages well above the federal minimum, is a desire to assist working people to achieve self-sufficiency. However, one unintended consequence of the increase is that some minimum wage workers may lose Medicaid eligibility. As they shift from Medicaid to insurance purchased through the state's health care exchanges, workers' out-of-pocket costs for coverage and care may increase dramatically.

The aim of this project is to understand how many people will be impacted and to what extent their costs will increase and to develop policy recommendations to help ensure continuous health care coverage that facilitates workers' transition to economic self-sufficiency while preserving access to health care.