Using Discontinuous Eligibility Rules to Identify the Effects of the Federal Medicaid Expansions

This paper exploits the discrete nature of the eligibility criteria for two major federal expansions of Medicaid to discern the effects of the expansions on Medicaid coverage, overall health insurance coverage, and coverage by private and other non-Medicaid sources. Using data from the Survey of Income and Program Participation, we examine the "133 percent" program, which covered children under the age of six in families with incomes up to 133 percent of the poverty line, and the "100 percent" program, which covered children in poor families born after September 30, 1983. Graphical and conventional difference-in-differences methods suggest that the 100 percent program led to a 10-15 percentage point rise in Medicaid coverage among the targeted group, with a small decline in non-Medicaid coverage and a rise in the incidence of dual coverage. The newly covered group includes children in families further from the AFDC income cutoffs and closer to the poverty line than the traditional Medicaid caseload, and includes more children in dual-headed families. By comparison, we are unable to find much evidence that the 133 percent program had any effect on Medicaid coverage of children in families with incomes from 100 to 133 percent of the poverty line. This negative finding is confirmed in data from the March Current Population Survey.