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Does Managed Care Widen Infant Health Disparities? Evidence from Texas Medicaid

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  • Ilyana Kuziemko
  • Katherine Meckel
  • Maya Rossin-Slater

Abstract

Medicaid programs increasingly finance competing, capitated managed care plans rather than administering fee-for-service (FFS) programs. We study how the transition from FFS to managed care affects high- and low-cost infants (blacks and Hispanics, respectively). We find that black-Hispanic disparities widen—e.g., black mortality and preterm birth rates increase by 15 percent and 7 percent, respectively, while Hispanic mortality and preterm birth rates decrease by 22 percent and 7 percent, respectively. Our results are consistent with a risk-selection model whereby capitation incentivizes competing plans to offer better (worse) care to low- (high-) cost clients to retain (avoid) them in the future.

Suggested Citation

  • Ilyana Kuziemko & Katherine Meckel & Maya Rossin-Slater, 2018. "Does Managed Care Widen Infant Health Disparities? Evidence from Texas Medicaid," American Economic Journal: Economic Policy, American Economic Association, vol. 10(3), pages 255-283, August.
    • Handle: RePEc:aea:aejpol:v:10:y:2018:i:3:p:255-83
    Note: DOI: 10.1257/pol.20150262
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    Citations

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    Cited by:

    1. Katherine Meckel, 2020. "Is the Cure Worse Than the Disease? Unintended Effects of Payment Reform in a Quantity-Based Transfer Program," American Economic Review, American Economic Association, vol. 110(6), pages 1821-1865, June.
    2. Lee, Ajin, 2025. "How does medicaid managed care affect provider behavior? New evidence from spillovers on private health care," Journal of Public Economics, Elsevier, vol. 248(C).
    3. Daniel Montanera & Abhay Nath Mishra & T. S. Raghu, 2022. "Mitigating Risk Selection in Healthcare Entitlement Programs: A Beneficiary-Level Competitive Bidding Approach," Information Systems Research, INFORMS, vol. 33(4), pages 1221-1247, December.
    4. Kreider, Amanda R. & Layton, Timothy J. & Shepard, Mark & Wallace, Jacob, 2024. "Adverse selection and network design under regulated plan prices: Evidence from Medicaid," Journal of Health Economics, Elsevier, vol. 97(C).
    5. Timothy J. Layton & Nicole Maestas & Daniel Prinz & Boris Vabson, 2019. "Private vs. Public Provision of Social Insurance: Evidence from Medicaid," NBER Working Papers 26042, National Bureau of Economic Research, Inc.
    6. Kennedy-Moulton, Kate & Miller, Sarah & Persson, Petra & Rossin-Slater, Maya & Wherry, Laura R. & Aldana, Gloria, 2022. "Maternal and Infant Health Inequality: New Evidence from Linked Administrative Data," IZA Discussion Papers 15745, Institute of Labor Economics (IZA).
    7. Sun, Liyang & Abraham, Sarah, 2021. "Estimating dynamic treatment effects in event studies with heterogeneous treatment effects," Journal of Econometrics, Elsevier, vol. 225(2), pages 175-199.
    8. Lee, Ajin & Vabson, Boris, 2024. "The value of improving insurance quality: Evidence from long-run Medicaid attrition," Journal of Health Economics, Elsevier, vol. 94(C).
    9. David Arboleda C√°rcamo, 2024. "Fitting a Curve to the Pre-Trends," Documentos CEDE 21199, Universidad de los Andes, Facultad de Economía, CEDE.

    More about this item

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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