Stemming the Tide? The Effect of Expanding Medicaid Eligibility On Health Insurance Coverage

Lara D. Shore-Sheppard, Williams College

Abstract

Despite considerable research, there is little consensus about the impact of Medicaid eligibility expansions for low-income children. In this paper, I reexamine the expansions’ impact on Medicaid take-up and private insurance “crowd-out” by investigating a number of critiques leveled at the seminal work of Cutler and Gruber (1996) and extending the analysis to include further expansions of Medicaid. I find that accounting for most critiques of Cutler and Gruber does not substantively affect their estimates of sizable take-up and crowd-out. However, controlling for age-specific time trends does substantially reduce the estimated take-up and crowd-out and recovers results close to those found elsewhere in the literature. I also find that later expansions generated much lower rates of take-up and crowding out.