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The Health Care Safety Net and Crowd-Out of Private Health Insurance

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  • Anthony T. Lo Sasso
  • Bruce D. Meyer

Abstract

There is an extensive literature on the extent to which public health insurance coverage through Medicaid induces less private health insurance coverage. However, little is known about the effect of other components of the health care safety net in crowding out private coverage. We examine the effect of Medicaid and uncompensated care provided by clinics and hospitals on insurance coverage. We construct a long panel of metropolitan area and state-level data on hospital uncompensated care and free and reduced price care offered by Federally Qualified Health Centers. We match this information to individual level data on coverage from the Current Population Survey for two distinct groups: children aged 14 and under and single, childless adults aged 18 to 64. Our results provide mixed evidence on the extent of crowd-out. Hospital uncompensated care does not appear to crowd-out health insurance coverage and health center uncompensated care appears to crowd-out private coverage for adults and, in some specifications, children.

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Bibliographic Info

Paper provided by Harris School of Public Policy Studies, University of Chicago in its series Working Papers with number 0417.

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Date of creation: Jan 2006
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Handle: RePEc:har:wpaper:0417

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Keywords: private; public health insurance; crowd-out;

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References

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  1. Rask, Kevin N. & Rask, Kimberly J., 2000. "Public insurance substituting for private insurance: new evidence regarding public hospitals, uncompensated care funds, and medicaid," Journal of Health Economics, Elsevier, Elsevier, vol. 19(1), pages 1-31, January.
  2. Chernew, Michael & Keenan, Patricia & Cutler, David, 2005. "Charity Care, Risk Pooling, and the Decline in Private Health Insurance," Scholarly Articles 2640562, Harvard University Department of Economics.
  3. Anthony T. LoSasso & Thomas C. Buchmueller, 2002. "The Effect of the State Children's Health Insurance Program on Health Insurance Coverage," NBER Working Papers 9405, National Bureau of Economic Research, Inc.
  4. Sheila Hoag & Stephen Norton & Shruti Rajan, 2000. "Federally Qualified Health Centers: Surviving Medicaid Managed Care, But Not Thriving," Mathematica Policy Research Reports, Mathematica Policy Research 2874, Mathematica Policy Research.
  5. Lara D. Shore-Sheppard & John C. Ham, 2003. "The Effect of Medicaid Expansions for Low-Income Children on Medicaid Participation and Private Insurance Coverage : Evidence from the SIPP," Department of Economics Working Papers, Department of Economics, Williams College 2003-10, Department of Economics, Williams College.
  6. Katherine Baicker & Douglas Staiger, 2004. "Fiscal Shenanigans, Targeted Federal Health Care Funds, and Patient Mortality," NBER Working Papers 10440, National Bureau of Economic Research, Inc.
  7. Janet Currie & Jonathan Gruber, 1994. "Saving Babies: The Efficacy and Cost of Recent Expansions of Medicaid Eligibility for Pregnant Women," NBER Working Papers 4644, National Bureau of Economic Research, Inc.
  8. David M. Cutler & Jonathan Gruber, 1995. "Does Public Insurance Crowd Out Private Insurance?," NBER Working Papers 5082, National Bureau of Economic Research, Inc.
  9. Esel Y. Yazici & Robert Kaestner, 1998. "Medicaid Expansions and The Crowding Out of Private Health Insurance," NBER Working Papers 6527, National Bureau of Economic Research, Inc.
  10. Blumberg, Linda J. & Dubay, Lisa & Norton, Stephen A., 2000. "Did the Medicaid expansions for children displace private insurance? An analysis using the SIPP," Journal of Health Economics, Elsevier, Elsevier, vol. 19(1), pages 33-60, January.
  11. Herring, Bradley, 2005. "The effect of the availability of charity care to the uninsured on the demand for private health insurance," Journal of Health Economics, Elsevier, Elsevier, vol. 24(2), pages 225-252, March.
  12. Janet Currie & Jonathan Gruber, 1995. "Health Insurance Eligibility, Utilization of Medical care, and Child Health," NBER Working Papers 5052, National Bureau of Economic Research, Inc.
  13. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, Elsevier, vol. 39(3), pages 347-366, November.
  14. Michael Chernew & David Cutler & Patricia Seliger Keenan, 2005. "Charity Care, Risk Pooling, and the Decline in Private Health Insurance," American Economic Review, American Economic Association, American Economic Association, vol. 95(2), pages 209-213, May.
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Cited by:
  1. Jonathan Gruber, 2008. "Covering the Uninsured in the United States," Journal of Economic Literature, American Economic Association, vol. 46(3), pages 571-606, September.
  2. Xuezheng Qin & Gordon Liu, 2013. "Does the US health care safety net discourage private insurance coverage?," The European Journal of Health Economics, Springer, Springer, vol. 14(3), pages 457-469, June.

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