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Participation and crowd out: Assessing the effects of parental Medicaid expansions

  • Hamersma, Sarah
  • Kim, Matthew

In this paper, we examine the effects of recent parental Medicaid eligibility expansions on Medicaid participation and private insurance coverage. We present a new approach for estimating these policy effects that explicitly models the particular policy instrument over which legislators have control–income eligibility thresholds. Our approach circumvents estimation problems stemming from misclassification or measurement error. Moreover, it allows us to assess how the policy effects may vary at different initial threshold levels. Using data from the Survey of Income and Program Participation, we find three main results. First, the eligibility expansions result in significant increases in Medicaid participation; a “typical” expansion increases Medicaid participation by about four percent of baseline coverage rates. Second, the participation effect is larger for lower initial thresholds and the effect decreases as Medicaid thresholds increase. Third, we find no statistically significant evidence of crowd out regardless of initial threshold level.

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Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 32 (2013)
Issue (Month): 1 ()
Pages: 160-171

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Handle: RePEc:eee:jhecon:v:32:y:2013:i:1:p:160-171
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505560

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  1. Ham, John C. & Shore-Sheppard, Lara, 2005. "The effect of Medicaid expansions for low-income children on Medicaid participation and private insurance coverage: evidence from the SIPP," Journal of Public Economics, Elsevier, vol. 89(1), pages 57-83, January.
  2. 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.
  3. Anna Aizer & Jeffrey Grogger, 2003. "Parental Medicaid Expansions and Health Insurance Coverage," NBER Working Papers 9907, National Bureau of Economic Research, Inc.
  4. Gruber, Jonathan & Simon, Kosali, 2008. "Crowd-out 10 years later: Have recent public insurance expansions crowded out private health insurance?," Journal of Health Economics, Elsevier, vol. 27(2), pages 201-217, March.
  5. 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.
  6. Busch, Susan H. & Duchovny, Noelia, 2005. "Family coverage expansions: Impact on insurance coverage and health care utilization of parents," Journal of Health Economics, Elsevier, vol. 24(5), pages 876-890, September.
  7. Shore-Sheppard Lara D., 2008. "Stemming the Tide? The Effect of Expanding Medicaid Eligibility On Health Insurance Coverage," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(2), pages 1-35, July.
  8. Hamersma, Sarah & Kim, Matthew, 2009. "The effect of parental Medicaid expansions on job mobility," Journal of Health Economics, Elsevier, vol. 28(4), pages 761-770, July.
  9. David M. Cutler & Jonathan Gruber, 1995. "Does Public Insurance Crowd Out Private Insurance?," NBER Working Papers 5082, National Bureau of Economic Research, Inc.
  10. Hamersma Sarah, 2013. "The Effects of Medicaid Earnings Limits on Earnings Growth among Poor Workers," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 13(2), pages 887-919, August.
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