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State variability in children's Medicaid/CHIP crowd-out estimates.

David B Muhlestein1, Eric E Seiber1

  • 1The Ohio State University College of Public Health-Division of Health Services Management and Policy.

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|April 23, 2014
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Summary

Health insurance crowd-out, where public plans replace private ones, varies significantly by state. Wealthier families eligible for public insurance are less likely to switch, indicating state-specific factors influence coverage decisions.

Keywords:
CHIPChildren's Health Insurance ProgramCrowd-OutHealth Care FinancingHealth PolicyInsuranceLawMedicaidPoliticsPremiumsRegulationSCHIP

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Area of Science:

  • Health Economics
  • Public Health Policy
  • Insurance Market Dynamics

Background:

  • Health insurance crowd-out occurs when public insurance enrollment displaces private insurance.
  • Crowd-out is a concern for Medicaid and Children's Health Insurance Program (CHIP) expansions, potentially increasing public expenditure.
  • Previous crowd-out estimates for children have ranged widely from 0% to 50%.

Purpose of the Study:

  • To estimate crowd-out of private insurance among children near state Medicaid/CHIP eligibility thresholds.
  • To provide state-level crowd-out estimates independent of program expansions.
  • To analyze the relationship between eligibility thresholds and crowd-out rates.

Main Methods:

  • Utilized a regression discontinuity approach.
  • Employed data from the American Community Survey (ACS).
  • Calculated state-level crowd-out estimates.

Main Results:

  • Observed significant state-level heterogeneity in crowd-out, from 0% to over 18%.
  • Found that higher state eligibility thresholds correlate with lower crowd-out rates.
  • Identified that children in wealthier families eligible for public insurance are less likely to switch.

Conclusions:

  • National crowd-out estimates are inappropriate due to state-specific variations in Medicaid and CHIP programs.
  • Socioeconomic status influences the decision to switch from private to public insurance.
  • Further research is needed to understand the drivers of inter-state heterogeneity in crowd-out.