Working Paper, Brown University, Department of Economics 2003-20
Of the ten million uninsured children in 1996, nearly half were eligible for Medicaid, the public health insurance program for poor families, but not enrolled. In response, policy efforts to improve coverage have shifted to increasing Medicaid take-up among those already eligible rather than expanding eligibility. However, little is known about the reasons poor families fail to use public programs or the consequences of failing to enroll. The latter is of particular relevance to Medicaid given that children are typically enrolled when they become sufficiently sick as to require hospitalization. Using detailed information on Medicaid outreach, enrollment and hospitalization rates in California, I find that 1) information and administrative costs are important barriers to program enrollment, and 2) enrolling children in Medicaid before they require hospitalization leads to a more efficient allocation of health care resources and better health by promoting preventative ambulatory care over more expensive hospital based care.