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How Well Does the U.S. Government Provide Health Insurance?

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  • Manan Roy

    ()
    (Southern Methodist University)

Abstract

The debate over universal health insurance (HI) in the U.S., as well as the proper role of the government in the HI market, has been quite heated. Fueling this debate is the uncertainty pertaining to the benefits of HI in general, and the relative benefits of private versus public HI in particular. This uncertainty stems from non-random selection into different types of HI (private, public, or none) in combination with the absence of experimental data. Moreover, the lack of typical exclusion restrictions complicates identification of the causal effects of different HI types. Here, the aim is to assess the causal impact of private HI, relative to public HI, on the insured infant's health. To that end, this study employs the methodology proposed in Altonji et al. (2005) which trades off what can be learned in exchange for not requiring an exclusion restriction. Nonetheless, the method remains quite informative in the present context. Specifically, using data from the Early Childhood Longitudinal Survey, Birth Cohort (ECLS-B), along with several measures of infant health, the results suggest that while private HI is {\it associated}\ with improved infant health, this association disappears once selection on observables and unobservables is considered. In fact, the estimated effects of private HI are predominantly {\it negative}\ once both types of selection are admitted. Further analysis reveals that the likely beneficial effects of public HI are due to greater coverage for infants at a much lower cost.

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File URL: ftp://ftp1.economics.smu.edu/WorkingPapers/2011/MROY/MROY-2011-05.pdf
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Bibliographic Info

Paper provided by Southern Methodist University, Department of Economics in its series Departmental Working Papers with number 1102.

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Date of creation: May 2011
Date of revision:
Handle: RePEc:smu:ecowpa:1102

Contact details of provider:
Postal: Department of Economics, P.O. Box 750496, Southern Methodist University, Dallas, TX 75275-0496
Phone: 214-768-2715
Fax: 214-768-1821
Web page: http://www.smu.edu/economics

Related research

Keywords: Health Insurance; Children; Treatment Effects;

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References

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  1. Currie, Janet & Gruber, Jonathan & Fischer, Michael, 1995. "Physician Payments and Infant Mortality: Evidence from Medicaid Fee Policy," American Economic Review, American Economic Association, vol. 85(2), pages 106-11, May.
  2. Juergen Jung & Chung Tran, 2014. "Market Inefficiency, Insurance Mandate and Welfare: U.S. Health Care Reform 2010," Working Papers 2014-01, Towson University, Department of Economics, revised Feb 2014.
  3. Janet Currie & Enrico Moretti, 2005. "Biology as Destiny? Short and Long-Run Determinants of Intergenerational Transmission of Birth Weight," NBER Working Papers 11567, National Bureau of Economic Research, Inc.
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  17. Joseph G. Altonji & Todd E. Elder & Christopher R. Taber, 2000. "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools," NBER Working Papers 7831, National Bureau of Economic Research, Inc.
  18. Leemore Dafny & Jonathan Gruber, 2000. "Does Public Insurance Improve the Efficiency of Medical Care? Medicaid Expansions and Child Hospitalizations," NBER Working Papers 7555, National Bureau of Economic Research, Inc.
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