Crowd-In: The Effect of Private Health Insurance Markets on the Demand for Medicaid

Filed under: Population Movement, Diversity, Inequality, Population and Health Policies and Programs

Perreira, Krista M. (2006). Crowd-In: The Effect of Private Health Insurance Markets on the Demand for Medicaid. Health Services Research, 41(5), 1762-81. PMCID: PMC1955304

Reference Type:
Journal Article

Secondary Title:

Series Title:

Author(s):
Perreira, Krista M.

Editor(s):

Series Author(s):

Year Published:
2006

Date Published:

Journal Name:
Health Services Research

Volume Number:
41

Issue Number:
5

Start Page Number:
1762-81

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Edition:

Series Volume:

Publisher:

City of Publication:

ISSN/ISBN:

DOI:
10.1111/j.1475-6773.2006.00563.x

PMCID:
PMC1955304

NIHMSID:

Reference ID:
2909

Miscellaneous:

Abstract:

Objective: To investigate the effects of local labor market conditions and the availability of employer-sponsored health insurance on exits from the Medicaid program. Data Source.

Data for this project come from a unique administrative database containing a 2 percent sample of all cases on California's Medicaid program in 1987 and a 2 percent sample of all new cases starting each year between 1987 and 1995. Study Design.

The results are estimated using a discrete duration model where the monthly exit probability is a function of demographic characteristics, local labor market variables, the probability of having employer-sponsored insurance, and fixed year and county effects. Principal Findings.

Improvements in labor market opportunities (i.e., employment growth, wage growth, and increases in the availability of employer-sponsored health insurance) promote exits off the Medicaid program. A 2.5 percentage point increase in the availability of employer-sponsored insurance leads to a 6 percent increase in the probability that a completed spell lasts no more than 2 years. It would take a 2 percentage point decrease in unemployment rates or a 10 percent increase in average quarterly earnings to yield an equivalent increase in the likelihood of exiting Medicaid within 2 years. These effects are robust to the inclusion of county-level fixed effects and time effects. Conclusions.

Medicaid expenditures and caseloads are sensitive to local economic fluctuations and secular trends in the availability of health insurance. Continued decreases in employer-based health insurance coverage will greatly increase the demand for public insurance coverage and the financial pressures on state governments.

Keyword(s):
Population Movement, Diversity, Inequality
Population and Health Policies and Programs

URL:

http://dx.doi.org/10.1111/j.1475-6773.2006.00563.x

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Citation:

Perreira, Krista M. (2006). Crowd-In: The Effect of Private Health Insurance Markets on the Demand for Medicaid. Health Services Research, 41(5), 1762-81. PMCID: PMC1955304