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

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  • Hamersma, Sarah
  • Kim, Matthew

Abstract

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.

Suggested Citation

  • Hamersma, Sarah & Kim, Matthew, 2013. "Participation and crowd out: Assessing the effects of parental Medicaid expansions," Journal of Health Economics, Elsevier, vol. 32(1), pages 160-171.
  • Handle: RePEc:eee:jhecon:v:32:y:2013:i:1:p:160-171 DOI: 10.1016/j.jhealeco.2012.09.003
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    References listed on IDEAS

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    1. 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.
    2. Anna Aizer & Jeffrey Grogger, 2003. "Parental Medicaid Expansions and Health Insurance Coverage," NBER Working Papers 9907, National Bureau of Economic Research, Inc.
    3. 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.
    4. David M. Cutler & Jonathan Gruber, 1996. "Does Public Insurance Crowd out Private Insurance?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 391-430.
    5. Lo Sasso, Anthony T. & Buchmueller, Thomas C., 2004. "The effect of the state children's health insurance program on health insurance coverage," Journal of Health Economics, Elsevier, vol. 23(5), pages 1059-1082, September.
    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. 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.
    8. 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.
    9. 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.
    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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    Citations

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    Cited by:

    1. Wagner, Kathryn L., 2015. "Medicaid expansions for the working age disabled: Revisiting the crowd-out of private health insurance," Journal of Health Economics, Elsevier, vol. 40(C), pages 69-82.
    2. Freedman, Seth & Lin, Haizhen & Simon, Kosali, 2015. "Public health insurance expansions and hospital technology adoption," Journal of Public Economics, Elsevier, vol. 121(C), pages 117-131.
    3. Sommers, Benjamin D. & Oellerich, Donald, 2013. "The poverty-reducing effect of Medicaid," Journal of Health Economics, Elsevier, vol. 32(5), pages 816-832.
    4. 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.
    5. Lincoln Groves, 2015. "Still “Saving Babies”? The Impact of Child Medicaid Expansions on High School Completion Rates," Center for Policy Research Working Papers 181, Center for Policy Research, Maxwell School, Syracuse University.
    6. Molly Frean & Jonathan Gruber & Benjamin D. Sommers, 2016. "Premium Subsidies, the Mandate, and Medicaid Expansion: Coverage Effects of the Affordable Care Act," NBER Working Papers 22213, National Bureau of Economic Research, Inc.
    7. Mark Duggan & Gopi Shah Goda & Emilie Jackson, 2017. "The Effects of the Affordable Care Act on Health Insurance Coverage and Labor Market Outcomes," NBER Working Papers 23607, National Bureau of Economic Research, Inc.
    8. repec:eee:pubeco:v:149:y:2017:i:c:p:20-34 is not listed on IDEAS
    9. Charles Courtemanche & James Marton & Benjamin Ukert & Aaron Yelowitz & Daniela Zapata, 2016. "Impacts of the Affordable Care Act on Health Insurance Coverage in Medicaid Expansion and Non-Expansion States," NBER Working Papers 22182, National Bureau of Economic Research, Inc.
    10. repec:eee:jhecon:v:53:y:2017:i:c:p:72-86 is not listed on IDEAS
    11. Lincoln Groves & Sarah Hamersma & Leonard M. Lopoo, 2017. "Pregnancy Medicaid Expansions and Fertility: Differentiating between the Intensive and Extensive Margins," Center for Policy Research Working Papers 206, Center for Policy Research, Maxwell School, Syracuse University.
    12. repec:eee:jhecon:v:55:y:2017:i:c:p:45-60 is not listed on IDEAS
    13. repec:bla:coecpo:v:35:y:2017:i:3:p:457-471 is not listed on IDEAS
    14. Wagner, Kathryn L., 2016. "Shock, but no shift: Hospitals' responses to changes in patient insurance mix," Journal of Health Economics, Elsevier, vol. 49(C), pages 46-58.
    15. Johanna Catherine Maclean & Benjamin L. Cook & Nicholas Carson & Michael F. Pesko, 2017. "Public Insurance and Psychotropic Prescription Medications for Mental Illness," NBER Working Papers 23760, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Public health insurance; Private health insurance; Medicaid; Crowd out;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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