STILL “SAVING BABIES”? THE IMPACT OF CHILD MEDICAID EXPANSIONS ON HIGH SCHOOL COMPLETION RATES

The decoupling of child Medicaid from the cash welfare system greatly increased access to public health insurance for low‐income children in the United States. In this paper, I show that the federally mandated public health insurance expansions of the late‐1980s and early‐1990s significantly increased the number of public high school completers in the 2000s. Using the legislated generosity of a state's child Medicaid program as a time‐varying, exogenous source of variation in a quasi‐experimental design, I find substantively large declines in the dropout rate and, importantly, large increases in traditional 4‐year graduation rates. Results for both measures are driven by Hispanic and White students, the two groups experiencing the greatest within‐group increases in eligibility due to the decoupling of child Medicaid from the Aid to Families with Dependent Children program. In addition, I find evidence that increases in the length of childhood years covered (e.g., through age 5 vs. through age 17) leads to greater gains in completion rates. This suggests that public health insurance coverage throughout childhood produces the largest effect. (JEL C23, H51, H52, H75, I21)     

MEDICAID AND THE LABOR SUPPLY OF SINGLE MOTHERS: IMPLICATIONS FOR HEALTH CARE REFORM

The Medicaid expansions and health insurance subsidies of the Affordable Care Act (ACA) change work incentives for single mothers. To evaluate the employment effects of these policies ex ante, I estimate a model of labor supply and health insurance choice exploiting variation in pre‐ACA Medicaid policies. Simulations show that single mothers increase their labor supply at the extensive and intensive margin by 12% and 7%, respectively, uninsurance rates decline by up to 40%, and an average family's welfare improves by 1,600 dollars per year. Health insurance subsidies and not Medicaid expansions mostly drive these effects.     

MEASURING THE IMPACT OF VALUING HEALTH INSURANCE ON LEVELS AND TRENDS IN INEQUALITY AND HOW THE AFFORDABLE CARE ACT OF 2010 COULD AFFECT THEM

A substantial part of the U.S. inequality literature focuses on yearly levels and trends in pre‐tax, post‐transfer cash income and its distribution over time and finds that median income appears to be stagnating, with income growth primarily coming at higher income levels. When we use data from the Current Population Survey for 1995–2008 and add the value of employer‐ and government‐provided health insurance coverage, not only does it increase the upward trend in the level of resources controlled by Americans, but also reduces the level of inequality in these resources and its upward trend. We then provide a highly stylized example of this broader income measure's value in capturing the impact of two key provisions of the Affordable Care Act of 2010—an expansion in Medicaid and the provision of subsidies to lower‐income families for purchasing private coverage on state‐run exchanges. Even though these incremental expansions build on existing systems of government‐provided health insurance, we find that the vast majority of the benefits would still accrue to the bottom three deciles of the income distribution when we include the value of employer‐ and government‐provided health insurance in our expanded yearly income measure. (JEL D31, H51, I14)     

Public insurance and child hospitalizations: access and efficiency effects

The 1983-1996 period saw enormous expansions in access to public health insurance for low-income children. We explore the impact of these expansions on child hospitalizations. While greater access to inpatient care may increase hospital utilization, improved efficiency of care for children who are also newly eligible for primary care could lower hospitalization rates. We use a large sample of child discharges from the National Hospital Discharge Survey (NHDS) to assess the net impact of Medicaid expansions on hospitalizations during this period. We find that total hospitalizations increased significantly, with each 10 percentage-point rise in eligibility leading to an 8.4% increase in hospitalizations. Thus, the access effect strongly outweighs any efficiency effect produced by expanded coverage. However, we find some support for an efficiency effect: the increase in hospitalizations for unavoidable conditions is much larger than that for avoidable conditions that are most sensitive to outpatient care. Indeed, the increase in avoidable hospitalizations is less than half that of unavoidable hospitalizations, and it is not statistically significant. We also find that expanded Medicaid eligibility reduced the average length of stay, but increased the utilization of inpatient procedures, so that the net impact on total costs per stay is ambiguous.     

The economics of crowd out under mixed public/private health insurance

It is well known that public insurance sometimes crowds out private insurance. Yet, the economic theory of crowd out has remained unstudied. Here, I show that crowd out causes two countervailing effects: (a) the intensive margin effect-since high demanders are crowded out, the private market now has a larger proportion of low demanders on the intensive margin (The intensive margin are those who have already bought private insurance), and so will drop quality to lower the price to the low demanders liking; and (b) the extensive margin effect-before the public insurance expansion, the private sector had lowered quality to make insurance more affordable at the extensive margin (The extensive margin is the next group of people who would buy private insurance if the price decreased), but now that public insurance crowds out the extensive margin, quality can then be raised back up to the high demanders liking.If the extensive margin effect dominates, then a new phenomenon of push out occurs, in which crowd out causes the private sector to raise quality and to increase the number of uninsured low demanders not eligible for public insurance. If the intensive margin effect dominates, then crowd out will cause the private sector to lower quality, causing the phenomenon of crowd-in, in which the number of uninsured low demanders that take-up private insurance increases.These two countervailing effects have important implications for any government policy that desires to eradicate all uninsurance. First, if push out is dominant, then the private sector will respond to the public insurance by pushing out and leaving some people newly uninsured. If crowd-in is dominant, then all people can be insured and the government can do it at a lower-than-anticipated level of expansion due to the private sector crowding in.Received: April 2002, Accepted: February 2003, JEL Classification: I11, I38The views herein do not necessarily reflect the views or policies of AHRQ, nor the U.S. Department of Health and Human Services. I thank Pedro Pita Barros, Hugh Gravelle, and Lise Rochaix-Ranson, and participants at the 2nd Health Economics Workshop at the Universidade Nova de Lisboa for helpful comments.     

The effect of Medicaid expansions for low-income children on Medicaid participation and private insurance coverage: evidence from the SIPP

We examine Medicaid enrollment and private coverage loss following expansions of Medicaid eligibility. We attempt to replicate Cutler and Gruber's [Q. J. Econ. 111 (1996) 391.] results using the Survey of Income and Program Participation (SIPP), and find smaller rates of take-up and little evidence of crowding out. We find that some of the difference in results can be attributed to different samples and recall periods in the data sets used. Extending the previous literature, we find that take-up is slightly increased if a child's siblings are eligible and with time spent eligible. Focusing on children whose eligibility status changes during the sample, we estimate smaller take-up effects. We find little evidence of crowding out in any of our extensions.     

WEARING OUT YOUR WELCOME: EXAMINING DIFFERENTIAL MEDICAID ELIGIBILITY OF NEW ENTRANTS AND CONTINUING RECIPIENTS

Until recently, states were permitted to have different “new entrant” and “continuing recipient” income limits for parental Medicaid eligibility by implementing income disregards that changed with spell length. Some states utilized this option—either tightening income limits for the same family over time or loosening them. In this article, we construct a theoretical model of utility‐maximizing workers facing different time‐dependent eligibility thresholds to predict the Medicaid participation and employment behavior of workers with varying wage levels. The model reveals some inter‐temporally perverse incentives created by linking eligibility thresholds to Medicaid duration. Then, we empirically test these predictions using the Survey of Income and Program Participation and a unique compilation of state‐by‐family size Medicaid thresholds for both new and continuing recipients. We find that patterns of Medicaid participation and spell duration are consistent with the predictions of our model. There is also evidence that the individuals predicted by our model to lower their work hours may supply fewer hours of labor. As of January 2014, the Affordable Care Act disallows time‐varying income disregards; our findings suggest that states previously using this strategy will experience an adjustment in Medicaid caseloads and possibly labor market outcomes because of the change. (JEL H4, I1, J2)     

ECONOMIC INCENTIVES AND CONTRACTS: THE USE OF PSYCHOTROPIC MEDICATIONS

The advent of novel psychotropic medications has revolutionized treatments for mental illnesses over the past few decades. Concurrently, changes in mental health coverage, particularly for Medicaid patients, created economic incentives for insurance carriers to shift costs and to encourage the use of psychotropic drugs. To quantify these effects, based on the framework in Griliches' seminal study on hybrid corn, we estimate logistic diffusion models using a longitudinal data set on Medicaid drug utilization. We find that financial incentives played a significant role in encouraging use of new medications that have lower physician specialty skill requirements. ( JEL O30, O33, I18, L14)     

HEALTH INSURANCE AND LABOR FORCE PARTICIPATION: WHAT LEGAL RECOGNITION DOES FOR SAME‐SEX COUPLES

Using Current Population Survey data, I examine how same‐sex couples' labor force participation and health insurance coverage change as a result of their unions being legally recognized. The results indicate female same‐sex couples switch from arrangements where both members work to arrangements where only one member of the couple works. Being able to gain health insurance through a spouse's employer seems to play a major role in this change. Male same‐sex couples experience no change in their labor force participation or health insurance. (JEL J08, I13, J18)     

Medicaid managed care: effects on children's Medicaid coverage and utilization

We use data from the National Health Interview Surveys (NHIS) to measure the effects of the growth of Medicaid managed care on children. We examine both the probability that individual children were Medicaid-covered and their utilization of care. We find that managed care penetration has significant effects on the composition of the Medicaid caseload: Young children are less likely to be covered, while poor school-age children are more likely to be covered. When we examine coverage by race, we find that black children are less likely to be covered where Medicaid managed care organizations (MMCOs) are more prevalent. These lower Medicaid enrollment rates are linked to increases in the numbers of young children who go without any doctor visits in a year. These results suggest that it is important to examine the potential effects of changes in Medicaid on selection into the Medicaid program, rather than focusing exclusively on the effects of managed care on those who are enrolled. In addition, among those enrolled in Medicaid, higher managed care penetration is associated with an increase in the number of black children with chronic conditions who go without doctor visits, but with decreases in the number of Hispanic children and poor teens who go without care.     

MEDICAID EXPANSION AND EMERGENCY DEPARTMENT UTILIZATION

This study measures the effect of Medicaid expansion on emergency department (ED) utilization. It also explores the mechanism through which treatment effects operate. Identification relies on a county‐level Medicaid expansion rollout within California from 2011 to 2013. The results suggest that Medicaid expansion increased ED utilization in California. Every time one individual transferred into the Medicaid program, there emerged one additional ED visit per year. Furthermore, the effect appears to be driven by difficulty accessing primary care. These findings suggest Medicaid expansion may have different effects in different environments, depending on how easily enrollees can schedule appointments. (JEL I13, I18, I38)     

HOW DO STATE INFERTILITY INSURANCE MANDATES AFFECT DIVORCE?

The technological developments in infertility treatments have increased the success of childbearing among women with impaired fertility. Fifteen U.S. states have mandated insurance coverage of assisted reproductive technology, thus subsidizing and increasing the use of the technology. We exploit the variation of mandates across states and over time to examine the relationship between state mandates and the likelihood of divorce. Using individual‐level data from the 1984–2008 Survey of Income and Program Participation, we find that women are less likely to divorce after the state adopts infertility insurance mandates. We find the effect is larger among women in their 40s, covered by private insurance, with a college degree, and without children. (JEL J12, J13, J18, I13, I18)     

Targeting in Medicaid: The costs and enrollment effects of Medicaid's citizenship documentation requirement

The Deficit Reduction Act of 2005 imposed a federal requirement that all individuals provide citizenship documentation when applying for or renewing Medicaid coverage. This represented a change in policy for 46 states. Using differences-in-differences to analyze data from the Current Population Survey (2004–2008), this paper shows that the policy reduced Medicaid enrollment among non-citizens, as intended, and did not significantly affect citizens. One-in-four adult non-citizens in Medicaid (390,000 total) and one-in-eight child non-citizens (81,000) were screened out by the policy annually. Child non-citizens were more likely to become uninsured afterwards, while adult non-citizens appeared to shift from Medicaid to other coverage.Overall, the citizenship documentation requirement reduced Medicaid participation among non-citizens in an appropriately targeted way. Nonetheless, a cost-benefit analysis indicates that the policy was a net loss to society of $600 million, through increased state administrative spending and compliance costs imposed on U.S. citizens applying for Medicaid.     

THE EFFECTS OF YOUNG ADULT‐DEPENDENT COVERAGE AND CONTRACEPTION MANDATES ON YOUNG WOMEN

This research investigates two features of the Affordable Care Act that especially affect young adults, the young adult‐dependent coverage (YAD) mandate and the requirement to cover contraception (CM). Both mandates were first enacted at the state level but have been studied only in isolation. We estimate a wide range of models allowing these mandates to have joint effects on insurance coverage, health‐care access, health outcomes and fertility. We provide new evidence that helps settle the mixed findings from past state‐level YAD and CM research and suggests the two mandates may combine to improve the well‐being of young adults. (JEL I18, I12, H75)     

On the value of Medicaid in providing access to long‐term care

The crowding‐out by Medicaid has been identified as a possible reason for the low demand for private long‐term care (LTC) insurance in the USA. I extend the previous analysis to the case in which budget constraints inhibit access to care. This reduces the role of the implicit tax and fundamentally changes the nature, scope, and welfare implications of crowding‐out. It suggests a large value of Medicaid that a private insurance market is unable to offer due to a dilemma prevalent in—but not exclusive to—the market for LTC insurance: a dilemma between access and affordability.     

QUANTIFYING THE IMPACTS OF LIMITED SUPPLY: THE CASE OF NURSING HOMES

This article develops a new estimation method that accounts for excess demand and the unobserved component of product quality. We apply our method to study the Wisconsin nursing home market in 1999 and find that nearly 20% of elderly qualified for Medicaid were rationed out. However, our counterfactual experiment shows that the net welfare gain of fulfilling all nursing home demands may be small, because the welfare gain could be largely offset by the increase in Medicaid expenditures. We also find that a 1% increase in quality would crowd out 3.2% Medicaid patients in binding nursing homes.     

DOES COBRA'S RETROACTIVE COVERAGE FEATURE ENCOURAGE DELAYED ENROLLMENT?

The Consolidated Omnibus Reconciliation Act (COBRA) of 1985, which aimed to protect individuals experiencing employment separation from losing employer‐provided health insurance, contains a feature that is unusual among health insurance markets. Individuals eligible for COBRA have 60 days following employment separation to elect coverage, and if they elect, coverage is retroactive back to the date of employment separation. This paper investigates whether employment separators take advantage of COBRA's retroactive coverage provision by delaying enrollment until after incurring medical expenses. Results indicate that an individual whose household incurs medical expenses during the months after employment separation is approximately 1?10 percentage points more likely to subsequently enroll in COBRA, depending on the magnitude of expenses. (JEL I18, I11)     

Efficiency of health care delivery systems: effects of health insurance coverage

Health insurance expansions may increase the demand for care-creating incentives for health systems to increase input consumption. The possibility remains that added capacity and personnel will have little effect on health outcomes, decreasing the technical efficiency of health care delivery systems. We estimate that a 1 percentage point increase in health insurance coverage decreases the technical efficiency of health care delivery by 1.3 percentage points, translating into approximately 50 billion dollars in additional health expenditures. This finding uncovers a previously unexplored consequence of changes in health insurance on the supply side of health care markets suggesting one avenue through which health care costs growth may occur.     

HETEROGENEOUS EFFECTS OF THE ACA MEDICAID EXPANSION ON HOSPITAL FINANCIAL OUTCOMES

This study examines the effect of the Affordable Care Act's Medicaid expansion on hospital financial outcomes. A key innovation relative to prior studies is that we explicitly account for heterogeneity across states in the timing and extent of the expansion as well as across hospital types. We find that Medicaid expansion led to a decrease in uncompensated care expenditures and an increase in average operating margins. The effects were larger in states where the Medicaid expansion led to a greater increase in program eligibility. Operating margins improved most for public hospitals and facilities located in rural areas. (JEL I11, I13, I18)     

TAXES,HEALTH INSURANCE,AND WOMEN'S SELF‐EMPLOYMENT

I examine whether the availability of health coverage through the spouse's health plan influences a married woman's decision to become self‐employed. The Tax Reform Act of 1986 (TRA86) introduced a tax subsidy for the self‐employed to purchase their own health insurance. I test whether this “natural” experiment induced more women without spousal health insurance coverage to select into self‐employment. The most conservative difference‐in‐difference estimates based on an analysis of employed women indicate that the incidence of self‐employment among single women rose by 10% in the post‐TRA86 period, while a multinomial specification based on a sample of both employed and nonemployed women suggests that the increase was about 13%. (JEL J0, J3, I1)