Economics at your fingertips  

Federal Subsidization and State Medicaid Provision

Jorge Barro () and Stephen Barnes ()

Review of Economic Dynamics, 2016, vol. 21, 29-45

Abstract: This paper explores the determination of state Medicaid provision in the United States and quantifies the effects of federal subsidization on the provision. The U.S. federal government matches every state at least one dollar for each dollar that the state spends on Medicaid. We measure the effect of the subsidy by constructing a multi-regional, heterogeneous-agent, dynamic general equilibrium model with incomplete insurance markets and calibrating it to the U.S. economy. In the model, state governments take the federal subsidy as given and implement Medicaid policy according to the decision of the median voter. The benchmark economy delivers a close approximation to the Medicaid coverage rate in 2012. To measure the effect of the federal subsidy, we set the subsidy to zero and find that state Medicaid coverage declines by 9%. We then study the mechanism determining Medicaid provision and find a positive relationship between progressivity of the tax structure and Medicaid coverage. (Copyright: Elsevier)

Keywords: Public health insurance; Federalism; Political economy (search for similar items in EconPapers)
JEL-codes: E62 H77 I13 I18 P16 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See for details.

Related works:
Software Item: Code and data files for "Federal Subsidization and State Medicaid Provision" (2016) Downloads
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:

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1016/

Access Statistics for this article

Review of Economic Dynamics is currently edited by Loukas Karabarbounis

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

Page updated 2021-09-13
Handle: RePEc:red:issued:14-111