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Journal Issue: Special Education for Students with Disabilities Volume 6 Number 1 Spring 1996

REVISITING THE ISSUES: The Effects of Medicaid Expansions on Insurance Coverage of Children
Lisa C. Dubay Genevieve M. Kenney

Editor's Note

In the Winter 1995 issue of The Future of Children, the Child Indicators article examined recent trends in health insurance coverage for children. A major conclusion of that article was that the proportion of children covered by private, employment-based health insurance has been declining in recent years while changes in the rules for eligibility for Medicaid have made that program increasingly important for children. Nearly eight million more children were covered by Medicaid in 1993 than in 1988, largely as a result of the eligibility expansions. However, the number of uninsured children grew by about one million during that same period.

In this Revisiting the Issues article, Lisa Dubay and Genevieve Kenney of the Urban Institute look more closely at the effects of the changes in the eligibility rules for Medicaid on children's insurance coverage between 1988 and 1993. They examine the extent to which Medicaid is covering the expansion-targeted population, many of whom would have been otherwise uninsured, and also the extent to which increased levels of Medicaid coverage for children merely substituted for employer-sponsored health insurance. They find that, although the Medicaid expansion led to a substantial increase in Medicaid enrollment for children, many uninsured children who are eligible for Medicaid are not being enrolled. With regard to the voluntary substitution of Medicaid coverage for employer-sponsored coverage, the analysis suggests that only 17% of the increase in Medicaid coverage for children between 1988 and 1993 is attributable to this substitution. Estimated rates of substitution are much higher, however, for near-poor children than for poor children. This suggests that further raising Medicaid income eligibility thresholds could substantially reduce the number of uninsured children but only at the price of also reducing the number with employer-sponsored insurance.