Skip over navigation

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


  1. Kasper, J.D. The importance of type of usual source of care for children's physician access and expenditures. Medical Care (1987) 25,5:386–98.
  2. Rosenbach, M.L. Insurance coverage and ambulatory medical care of low-income children: United States, 1980. Reports from the National Medical Care Utilization and Expenditure Survey. Series C, Analytical Report No. 1. Washington, DC: U.S. Department of Health and Human Services, Public Health Service, National Center for Health Statistics, 1985.
  3. Short, P.F., and Leftkowitz, D.C. Encouraging preventive services for low-income children: The effect of expanding Medicaid. Paper presented at the 1991 Annual Meeting of the Association for Health Services Research. San Diego, CA, 1991.
  4. Leftkowitz, D.C., and Short, P.F. Medicaid eligibility and the use of preventive services by low-income children. Paper presented at the 1989 Annual Meeting of the American Public Health Association. Chicago, IL, 1989.
  5. For a more detailed discussion of state initiatives, see Hill, I.T., Bartlett, L., and Bostrom, M.B. State initiatives to cover uninsured children. The Future of Children (Summer/Fall 1993) 3,2:142–63; DeGraw, C., Park, E.J., and Hudman, J.A. Revisiting the issues: State initiatives to provide medical coverage for uninsured children. The Future of Children (Spring 1995) 5,1:223–31; or Lewit, E.M., and Baker, L.S. Child indicators: Health insurance coverage. The Future of Children (Winter 1995) 5,3:192–204.
  6. Unpublished tabulations of the Health Care Financing Administration, Form 2082 data.
  7. Holahan, J., Winterbottom, C., and Rajan, S. The changing composition of health insurance coverage in the United States. Health Affairs (Winter 1995) 14,4:253.
  8. KPMG Peat Marwick. Health Benefits in 1993. Newark, NJ:KPMG Peat Marwick, 1993.
  9. See note no. 5, Lewit and Baker.
  10. This statement is not meant to imply that Medicaid and private coverage can be equated. On the one hand, Medicaid, in contrast to many employer-sponsored plans, covers all preventive care visits and does not require the deductibles, which may inhibit some low-income families from obtaining necessary preventive or illness-related care. Therefore, some children may be better off with Medicaid than with employer-sponsored coverage. On the other hand, the well-documented access and quality problems within the Medicaid program may present significant barriers to obtaining appropriate care for some children. Therefore, substituting Medicaid for private insurance coverage could lead to better or worse access, depending on the characteristics of both the employer-sponsored coverage and the Medicaid program.
  11. Newacheck, P., Hughes, D., and Cisternas, M. Children and health insurance: An overview of recent trends. Health Affairs (Spring 1995) 14,1:244–54.
  12. Cutler, D., and Gruber, J. Does public insurance crowd out private insurance? Working Paper No. 5082. Washington, DC: National Bureau of Economic Research, 1995.
  13. For a more complete critique of this paper, see Dubay, L. and Kenney, G. Did the Medicaid expansions crowd out private coverage? Working paper no. 6217-11. Washington, DC: Urban Institute, 1995.
  14. For a complete discussion of TRIM2, see Giannarelli, L. An analyst's guide to TRIM2. Washington, DC: Urban Institute Press, 1992.
  15. Lewit and Baker (see note no. 5) examine changes in insurance coverage for children under 18. Eighteen-year-olds are included in this analysis because, at this age, they still may be covered under Medicaid as dependent children and under private insurance policies as dependents.
  16. This practice allows individuals to report more than one type of coverage.
  17. Swartz, K. Interpreting the estimates from four national surveys of the number of people without health insurance. Journal of Economic and Social Measurement (1986) 14:233–42; U.S. Department of Commerce, Bureau of the Census. Health insurance coverage: 1986–88. Current Population Reports, Series. P-70, No. 17. Washington, DC: U.S. Government Printing Office, 1990; Winterbottom, C., Liska D., and Obermaier, K. Statelevel data book on health care access and financing. Washington, DC: Urban Institute Press, 1995.
  18. The term "Medicaid-eligible" is used in this paper to identify children who met all the eligibility requirements for Medicaid regardless of whether they actually received any Medicaid services. This is in contrast to the use of the term Medicaid-eligible by the Health Care Financing Administration to signify individuals who are actually enrolled in the program.
  19. The Current Population Survey does not distinguish between children who have both Medicaid and private insurance coverage simultaneously in a year and those who have these sources of coverage at different times during a year. See the Child Indicators article by Lewit and Baker in the Winter 1995 issue of The Future of Children for a description of how children's insurance status is determined in the CPS and TRIM2.
  20. Children appear to enroll in Medicaid at much higher rates than pregnant women despite the effort to streamline the eligibility process for pregnant women. (See note no. 13, Dubay and Kenney.)
  21. Consideration was given to using women of childbearing years and older children as other comparison groups. Women of childbearing years were rejected because their experience over this period could have been influenced by the expansions for pregnant women. Older children were rejected because their experience might have been affected by younger siblings' eligibility for Medicaid.
  22. For the near poor, this calculation is (21.28–8.12), or 13.18; for the poor, it is (2.33–1.32), or 1.
  23. For the near poor, this calculation is (13.18–(0.5 *14.42)), or 5.97; for the poor, it is (1.01 – (0.5 * 0.1)), or 1.06.
  24. For the near poor, this calculation is (5.97/(20.39 + (0.5 * 14.42))), or 0.216; for the poor, it is (1.06/(10.34 + (0.05 * –0.1))), or 0.154.
  25. 25. The weights are 0.269 for the near poor and 0.731 for the poor. The calculation is then ((0.216 * 0.269) + (1.54 *0.731)), or 0.170.
  26. This upper bound probably represents an overestimate of the shift in financing because some of these children are moving from Medicaid to employer coverage and some are maintaining both types of coverage for some portion of the year. Clearly, more research is needed to understand the insurance coverage patterns of these children.
  27. This crowd-out estimate (and the upper-bound estimate) are less than that reported by Cutler and Gruber (see note no. 12), who estimate the total effect of crowding out for children to be between 31% and 49%. These estimates are not readily comparable because the estimates in this article are based on children under age 11 while those reported by Cutler and Gruber are based on all children. Furthermore, this article focuses on children with incomes below 133% of poverty while Cutler and Gruber examine all income groups. Although there are many differences between the work of Dubay and Kenney and that of Cutler and Gruber, the key difference is that Cutler and Gruber fail to account for the secular decline in employer-sponsored coverage, which causes their estimates to overstate crowd-out. When controls for secular trends are omitted, the resulting estimates are similar to those of Cutler and Gruber. For a more complete discussion of these issues, see note no. 13, Dubay and Kenney.
  28. Gavin, N. I. Review and synthesis of the literature on financial barriers to health care services for children. Report prepared under the Evaluation of the Medicare Catastrophic Coverage Act. HCFA Contract No. 500-89-0063. Abt Associates, Inc. Washington, DC: Systemetrics, 1991.