Effects of welfare reform and the state children’s health insurance program on medicaid and total health expenditures

Anusua Datta and Donald Vandegrift ()

MPRA Paper from University Library of Munich, Germany

Abstract: 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.

Keywords: Healthcare costs; Medicaid; SCHIP; Welfare Reform (search for similar items in EconPapers)
JEL-codes: I00 I18 I38 (search for similar items in EconPapers)
Date: 2011-12-20
New Economics Papers: this item is included in nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/36486/1/MPRA_paper_36486.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:36486

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().