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March 22, 2002,
12:00 p.m.
Abstract: Increased availability of public health insurance for children has led to two potentially contradictory concerns for public policy: that expanded availability of public insurance may lead families to decline private insurance and that additional public coverage may not reach many uninsured children. To examine these concerns we use data from the 1987-1993 Surveys of Income and Program Participation and estimate dynamic models of insurance choice. Dynamic models permit the separate examination of transitions between three insurance states: i) public insurance, ii) private insurance; and iii) no insurance. This extends earlier work which has focused almost exclusively on adults and tends to examine transitions between only two states. We find that impact of expanded Medicaid eligibility on income limits are significantly negative in the: i) transition rate from private to no insurance and ii) transition rate from public to no insurance. The income limits significantly increase: i) the transition rate from private to public insurance and ii) the transition rate from no insurance to public insurance. Finally, the income limits does not affect transitions from public to private insurance. The results suggest that crowding out occurs through transition rates from private to public insurance and not from public to private insurance. |
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