Health insurance and welfare reentry

This study presents a theoretical model of welfare reentry that examines the importance of private health insurance in determining whether working recipients terminated from Aid to Families with Dependent Children (AFDC) as a result of the Omnibus Budget Reconciliation Act returned to welfare over a two-year period. Our empirical results suggest that the lack of private health insurance is a statistically significant and quantitatively important determinant of welfare reentry. Since the vast majority of the terminated families remained off welfare, however, these results suggest the difficulty of meeting the health needs of the employed uninsured.