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The Effect of Medicaid Expansions for Low-Income Children on Medicaid Participation and Insurance Coverage: Evidence from the SIPP

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  • John C. Ham
  • Lara D. Shore-Sheppard

Abstract

Increased availability of public health insurance for children has led to two potentially contradictory concerns for public policy: that expanded availability of public insurance may lead families to decline private insurance and that additional public coverage may not reach many uninsured children. We examine these two concerns using data from the 1987-1993 Surveys of Income and Program Participation. Using static models we find that the expansions resulted in increased Medicaid coverage, although the estimates of take-up are smaller than estimates from previous research. We find little evidence of a negative relationship of any significant magnitude between eligibility for Medicaid and private coverage. We also find that children who have been eligible for Medicaid longer are more likely to be enrolled in Medicaid but no more likely to have lost private coverage. Including individual fixed effects reduces the magnitude of the estimated take-up effect, while the fixed effects estimates for the private insurance regression become negative and marginally statistically significant in some specifications. Simple dynamic models of insurance choice show that insurance choice is quite persistent. The estimated long run impact of eligibility in the dynamic models is larger than the estimate from the static models, while the immediate impact of expanded Medicaid eligibility from the dynamic models is smaller than the estimated effect from the static models.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8063.

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Date of creation: Jan 2001
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Publication status: published as Ham, John C. and Lara Shore-Sheppard. "The Effect Of Medicaid Expansions For Low-Income Children On Medicaid Participation And Private Insurance Coverage: Evidence From The SIPP," Journal of Public Economics, 2005, v89(1,Jan), 57-83.
Handle: RePEc:nbr:nberwo:8063

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  1. Lara D. Shore-Sheppard, 2005. "Stemming the Tide? The Effect of Expanding Medicaid Eligibility on Health Insurance," Department of Economics Working Papers 2005-06, Department of Economics, Williams College.
  2. 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, vol. 19(1), pages 33-60, January.
  3. David M. Cutler & Jonathan Gruber, 1995. "Does Public Insurance Crowd Out Private Insurance?," NBER Working Papers 5082, National Bureau of Economic Research, Inc.
  4. Currie, Janet & Gruber, Jonathan, 1996. "Health Insurance Eligibility, Utilization of Medical Care, and Child Health," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 431-66, May.
  5. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
  6. Michael P. Keane & Kenneth I. Wolpin, 2002. "Estimating Welfare Effects Consistent with Forward-Looking Behavior. Part II: Empirical Results," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 600-622.
  7. Browning, Martin & Deaton, Angus & Irish, Margaret, 1985. "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica, Econometric Society, vol. 53(3), pages 503-43, May.
  8. 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.
  9. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-26, November.
  10. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  11. James J. Heckman & Thomas E. MaCurdy, 1985. "A Simultaneous Equations Linear Probability Model," Canadian Journal of Economics, Canadian Economics Association, vol. 18(1), pages 28-37, February.
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Cited by:
  1. David Card & Lara D. Shore-Sheppard, 2004. "Using Discontinuous Eligibility Rules to Identify the Effects of the Federal Medicaid Expansions on Low-Income Children," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 752-766, August.
  2. McGarry, Kathleen, 2002. "Public Policy and the U.S. Health Insurance Market: Direct and Indirect Provision of Insurance," National Tax Journal, National Tax Association, vol. 55(4), pages 789-827, December.
  3. Thomas Buchmueller & Anthony Lo Sasso & Kathleen Wong, 2007. "How Did SCHIP Affect the Insurance Coverage of Immigrant Children?," NBER Working Papers 13261, National Bureau of Economic Research, Inc.
  4. Borjas, George J., 2003. "Welfare reform, labor supply, and health insurance in the immigrant population," Journal of Health Economics, Elsevier, vol. 22(6), pages 933-958, November.
  5. Akinori Tomohara & Ho Lee, 2007. "Did State Children’s Health Insurance Program Affect Married Women’s Labor Supply?," Journal of Family and Economic Issues, Springer, vol. 28(4), pages 668-683, December.
  6. 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.
  7. David Card & Lara Dawn Shore-Sheppard, 2001. "Using Discontinuous Eligibility Rules to Identify the Effects of the Federal Medicaid Expansions," JCPR Working Papers 248, Northwestern University/University of Chicago Joint Center for Poverty Research.
  8. Elizabeth Powers, 2002. "Did the Medicaid-Eligibility Expansions Increase the Reporting of Children's Health Problems? Evidence from the SIPP," JCPR Working Papers 270, Northwestern University/University of Chicago Joint Center for Poverty Research.

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