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Saving Babies: The Efficacy and Cost of Recent Expansions of Medicaid Eligibility for Pregnant Women

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  • Janet Currie
  • Jonathan Gruber

Abstract

A key question for health care reform in the U.S. is whether expanded health insurance eligibility will lead to improvements in health outcomes. We address this question in the context of dramatic expansions in the Medicaid eligibility for pregnant women that took place during the 1980s. We build a detailed simulation model of each state's Medicaid policy during the 1979-1990 period, and use this model to estimate 1) the effect of changes in the rules on the eligibility of pregnant women for Medicaid, and 2) the effect of Medicaid eligibility changes on birth outcomes in aggregate Vital Statistics data. We have three main findings. First, the expansions did dramatically increase the Medicaid eligibility of pregnant women, but did so at quite differential rates across the states. Second, the expansions lowered the incidence of infant mortality and low birthweight; we estimate that the 20 percentage point increase in eligibility among 15-44 year old women was associated with a decrease in infant mortality of 7%. Third, earlier, targeted changes in Medicaid eligibility, such as through relaxations of the family structure requirements from the AFDC program, had much larger effects on birth outcomes than broader expansions of eligibility to all women with somewhat higher income levels. We suggest that the source of this difference was the much lower takeup of Medicaid coverage by individuals who became eligible under the broader expansions. We find that the targeted expansions, which raised Medicaid expenditures by $1.7 million per infant life saved, were in line with conventional

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4644.

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Date of creation: Feb 1994
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Publication status: published as Journal of Political Economy, Dec.1996, 104(6), pp.1263-1296
Handle: RePEc:nbr:nberwo:4644

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  1. Michael Grossman & Steven Jacobowitz, 1981. "Variations in Infant Mortality Rates among Counties in the United States: The Roles of Social Policies and Programs," NBER Working Papers 0615, National Bureau of Economic Research, Inc.
  2. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  3. Jeffrey E. Harris, 1982. "Prenatal Medical Care and Infant Mortality," NBER Chapters, in: Economic Aspects of Health, pages 13-52 National Bureau of Economic Research, Inc.
  4. Rebecca Blank & David Card & Whitney Newey, 1988. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," Working Papers 623, Princeton University, Department of Economics, Industrial Relations Section..
  5. Hope Corman & Theodore J. Joyce & Michael Grossman, 1985. "Birth Outcome Production Functions in the U.S," NBER Working Papers 1729, National Bureau of Economic Research, Inc.
  6. Stephen Chaikind & Hope Corman, 1990. "The Special Education Costs of Low Birthweight," NBER Working Papers 3461, National Bureau of Economic Research, Inc.
  7. A. S. Yelowitz, . "The Medicaid notch, labor supply, and welfare participation: Evidence from eligibility expansions," Institute for Research on Poverty Discussion Papers 1084-96, University of Wisconsin Institute for Research on Poverty.
  8. Bruce D. Meyer, 1989. "A Quasi-Experimental Approach to the Effects of Unemployment Insurance," NBER Working Papers 3159, National Bureau of Economic Research, Inc.
  9. Mark R. Rosenzweig & T. Paul Schultz, 1982. "The Behavior of Mothers as Inputs to Child Health: The Determinants of Birth Weight, Gestation, and Rate of Fetal Growth," NBER Chapters, in: Economic Aspects of Health, pages 53-92 National Bureau of Economic Research, Inc.
  10. Cropper, Maureen L. & William N. Evans & Stephen J. Berard & Maria M. Ducla-Soares & Paul R. Portney, 1992. "The Determinants of Pesticide Regulation: A Statistical Analysis of EPA Decision Making," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 175-97, February.
  11. Mark R. Rosenzweig & T. Paul Schultz, 1988. "The Stability of Household Production Technology: A Replication," Journal of Human Resources, University of Wisconsin Press, vol. 23(4), pages 535-549.
  12. Currie, Janet & Cole, Nancy, 1993. "Welfare and Child Health: The Link between AFDC Participation and Birth Weight," American Economic Review, American Economic Association, vol. 83(4), pages 971-85, September.
  13. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
  14. Richard G. Frank & Donna Strobino & David S. Salkever & Catherine A. Jackson, 1991. "Updated Estimates of the Impact of Prenatal Care on Birthweight Outcomes by Race," NBER Working Papers 3624, National Bureau of Economic Research, Inc.
  15. Michael Grossman & Steven Jacobowitz, 1981. "Variations in infant mortality rates among counties of the United States: The roles of public policies and programs," Demography, Springer, vol. 18(4), pages 695-713, November.
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