Determinants of public and private insurance enrollment among Medicaid-eligible children

Many Medicaid-eligible children are not enrolled in Medicaid and are not covered by private insurance. Reducing persistent lack of insurance for children requires a better understanding of why Medicaid-eligible children do not participate.

Does the availability of free or low-cost medical services substitute for Medicaid or private insurance enrollment among Medicaid-eligible children? Does the availability and affordability of insurance coverage, particularly the offer of employer-sponsored insurance (ESI) and the presence of managed care, affect child insurance coverage?

We use data from the National Health Interview Survey for 1994 and 1995, supplemented with county level measures of insurance and provider supply, to estimate a multinomial choice model of insurance coverage among children identified as Medicaid-eligible. We focus on county supply of public hospitals and community/migrant health centers (C/MHC); and the availability and cost of ESI. We control for child and parent characteristics.

A positive effect of C/MHC supply is found on Medicaid enrollment, but no evidence is found of substitution between low-cost providers and Medicaid or private coverage. Local availability of ESI and private HMO penetration increased private insurance enrollment.

Local community providers can play an important role in outreach and enrollment for Medicaid. Availability and cost of ESI constrain private coverage for Medicaid-eligible children. Policies that encourage offers of insurance coverage by employers, decrease premiums, and encourage adoption of managed care could have important positive effects on coverage for this population.