Datta, Anusua and Vandegrift, Donald (2011): Effects of welfare reform and the state children’s health insurance program on medicaid and total health expenditures.
Download (330kB) | Preview
Medicaid expenditures account for a sizeable proportion of U.S. GDP - $360.3 billion in 2009 or 2.55 percent of GDP. Despite this, the Affordable Care Act of 2010 (i.e. the new Obama healthcare initiative) further expands eligibility criteria for the Medicaid program. However, there is little literature on the effect on healthcare spending from earlier expansions of Medicaid such as the introduction of the SCHIP program. Moreover, the effect of welfare reform (i.e. Personal Responsibility and Work Opportunity Reconciliation Act of 1996) on Medicaid spending has received little attention. Using panel data from all 50 U.S. states for the period 1990-2004, we find that adding one person to the SCHIP rolls in a state that has established an SCHIP program in Medicaid raises real Medicaid spending about $4,100. However, we find evidence that additional SCHIP enrollments also affect non-Medicaid health spending. Thus, the total costs of insuring these patients are significantly higher (about $7,700). For states that have established Medicaid-combined programs, adding one person to the SCHIP rolls raises real healthcare spending about $1,800 after two years. Finally, we find that welfare reform reduced annual Medicaid expenditures by about $1.2 billion and total healthcare spending by about $2.5 billion.
|Item Type:||MPRA Paper|
|Original Title:||Effects of welfare reform and the state children’s health insurance program on medicaid and total health expenditures|
|Keywords:||Healthcare costs; Medicaid; SCHIP; Welfare Reform|
|Subjects:||I - Health, Education, and Welfare > I1 - Health > I18 - Government Policy; Regulation; Public Health
I - Health, Education, and Welfare > I3 - Welfare and Poverty > I38 - Government Policy; Provision and Effects of Welfare Programs
I - Health, Education, and Welfare > I0 - General > I00 - General
|Depositing User:||Donald Vandegrift|
|Date Deposited:||07. Feb 2012 05:37|
|Last Modified:||13. Feb 2013 11:51|
Adamy, J., 2011. Governors Seek Leeway to Cut Medicaid Rolls. The Wall Street Journal, Jan. 7, p. A2.
Adamy, J. and King, N., 2010. Some States Weigh Unthinable Option: Ending Medicaid. The Wall Street Journal, Nov. 22, p. A6.
Aizer, A., Grogger, J., 2003. Parental Medicaid expansions and health insurance coverage. NBERWorking Paper #9907.
Amirkhanyan, A., Kim, H., Lambright, K., 2008. Does the Public Sector Outperform the Nonprofit and For-Profit Sectors? Evidence from a National Panel Study on Nursing Home Quality and Access. Journal of Policy Analysis and Management, 27: 326–353.
Baicker, K., 2001. Government Decision-Making and the Incidence of Federal Mandates. Journal of Public Economics 82: 147-194.
Bialik, C., 2010, Health Studies Cited for Transplant Cuts Put Under the Knife. The Wall Street Journal, Dec. 18, p. A2.
Busch, S. H., Duchovny, L., 2005. Family Coverage Expansions: Impact on Insurance Coverage and Health Care Utilization of Parents. Journal of Health Economics 24: 876-890.
Card, D., Shore-Sheppard, L.D., 2003. Using Discontinuous Eligibility Rules to Identify the Effects of Federal Medicaid Expansions. Review of Economics and Statistics 86: 752-766.
Currie, J., Gruber, J., 1996. Health insurance eligibility, utilization of medical care, and child health. Quarterly Journal of Economics 111: 431–466.
Cutler, D., Gruber, J., 1996. Does Public Insurance Crowd Out Private Insurance? Quarterly Journal of Economics 111: 399–430.
Cutler, D., Sheiner, L., 1999. The Geography of Medicare. American Economic Review Papers and Proceedings 89: 228-233.
Cutler, D., Meara, E., 2001. The Concentration of Medical Spending. In Wise, David A., ed. Themes in the Economics of Aging Industry (University of Chicago Press, Chicago).
Dion, R.M., Pavetti, L., 2000. “Access to and Participation in Medicaid and Food Stamp Program.” Report Mathematica Policy Research, Inc., submitted to the U.S. Department of Health and Human Services.
Dubay, L., Genevieve, K., 2001. Covering Parents through Medicaid and SCHIP: Potential Benefits to Low-Income Parents and Children. The Kaiser Commission on Medicaid and the Uninsured.
Ellwood M., Irvin, C., 2000. Welfare Leavers and Medicaid Dynamics: Five States in 1995. Mathematica Policy Research, Cambridge, MA.
Ellwood M., Ku, L., 1998. Welfare and Immigration Reform: Unintended Side Effects for Medicaid. Health Affairs 17: 137-151.
Finkelstein, Eric A., Fiebelkorn, Ian C., Wang, Guijing. 2003. National Medical Spending Attributable to Overweight and Obesity: How Much and Who’s Paying? Health Affairs W3: 220-226.
Finkelstein, Eric A., Fiebelkorn, Ian C., Wang, Guijing. 2004. State-Level Estimates of Annual Medical Expenditures Attributable to Obesity. Obesity Research 12: 18-24.
Garret, B., J. Holahan, A. Yamane. 2002. Unemployment, Welfare Reform, and Medicaid Enrollment. Academy for Health Services Research and Health Policy (abstract) 19: 9.
Garrett, B., Holahan, J., 2000. “Health Insurance Coverage after Welfare.” Health Affairs 19: 175-184.
Geppert, J., McClellan, M., 2001. Trends in Medicare Spending Near the End of Life. In Wise, David A., ed. Themes in the Economics of Aging Industry (University of Chicago Press, Chicago).
Gruber, J., 2008. Covering the Uninsured in the United States. Journal of Economic Literature, 46: 571–606.
Hadley, J., Holahan, J., 2003. Is Health Care Spending Higher under Medicaid or Private Insurance? Inquiry 40: 323-342.
Ham, J., Shore-Sheppard, L., 2005. The Effect of Medicaid Expansions for Low-Income Children on Medicaid Participation and Private Insurance Coverage: Evidence from the SIPP. Journal of Public Economics 89: 57-83.
Holahan, J., Ghosh, A., 2005. Understanding the Recent Growth in Medicaid Spending, 2000-2003. Health Affairs W5: 52-62.
Ip, G., 2007. Bernanke Raises Prospect of a Debt Spiral, The Wall Street Journal, Jan. 19, p. A2.
Kaiser Commission on Medicaid and the Uninsured, 2010. Hoping for Economic Recovery, Preparing for Reform: A Look at Medicaid Spending, Coverage and Policy Trends: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2010 and 2011, Appendix A-2., Available at: http://www.kff.org/medicaid/8105.cfm.
Kronick, R., Gilmer, T., 2001. Insuring Low-Income Adults: Does Public Coverage Crowd Out Private? Health Affairs 21: 225–239.
Kotlikoff, L., Burns, S., 2004. The Coming Generational Storm: What You Need to Know About America’s Economic Future (MIT Press, Cambridge).
Ku, Leighton, Bruen, B., 1999. The Continuing Decline in Medicaid Coverage, in New Federalism: Issues for States. The Urban Institute, Series A, No. A-37.
Ku, Leighton, Broaddus, M., 2003. Why Are the State’s Medicaid Expenditures Rising? Center on Budget and Policy Priorities, January 13.
Little, J., 1992. Lessons from Variations in State Medicaid Expenditures. New England Economic Review, 43-66.
LoSasso, A., Buchmueller, T., 2004. The Effect of the State Children’s Health Insurance Program on Health Insurance Coverage. Journal of Health Economics 23: 1059-1082.
Lueck, S., 2007. Opening Bid on Health Care. The Wall Street Journal, Feb. 6, p. A4.
Marton, James,Wildasin, David E. 2007. Medicaid Expenditures and State Budgets: Past, Present, and Future. National Tax Journal 60: 279-304.
National Association of State Budget Officers. 2007. Fiscal Year 2006 State Expenditure Report.
Pritchard, R. S., et al. 1998. Influence of Patient Preferences and Local Health System Characteristics on the Place of Death. Journal of the American Geriatric Society, 46, 1242-1250.
RAND COMPARE. 2008. Analysis of Medicaid/SCHIP Eligibility. http://www.randcompare.org/analysis-of-options/analysis-of-medicaidschip-eligibility
Rossiter, L., Neice, R., 2006. Medicaid, State Finances, and the Bottom Line for Businesses. Business Economics 41: 49-54.
Skinner, Jonathan, Fisher, Elliot. 1997. Regional Disparities in Medicare Expenditures: An Opportunity for Reform. National Tax Journal 50: 413-425.
Skinner, Jonathan, Wennberg, John E. 2000a. How Much Is Enough: Efficiency and Medicare Spending in the Last Six Months of Life. In Cutler, David M., ed. The Changing Hospital Industry (University of Chicago Press, Chicago).
Skinner, Jonathan, Wennberg, John E. 2000b. Regional Inequality in Medicare Spending: The Key Medicare Reform. In Garber, Alan M., ed. Frontiers in Health Policy Research, Vol. 3 (MIT Press, Cambridge).
Solomon, D., Wessel, D., 2007. Health Insurance Gap Surges as a Political Issue. The Wall Street Journal, Jan. 19, p. A1.
Sturm, R., 2002. The Effects of Obesity, Smoking, and Drinking on Medical Problems and Costs. Health Affairs 21: 245-253.
Truffer, C., Klemm, J., Hoffman, E. Dirk, W., Christian, J., 2008. 2008 Actuarial Report on the Financial Outlook for Medicaid. Office of the Actuary, Centers for Medicare and Medicaid Services.
Truffer, C., Keehan, S., Smith, S., Cylus, J., Sisko, A., Poisal, J., Lizonitz, J., Clemens, K., 2010. Health Spending Projections Through 2019: The Recession’s Impact Continues. Health Affairs 29: 1-8.
Weisman, J., 2009. States Fight Medicaid Expansion. The Wall Street Journal, June 23, p. A4.