Association for Public Policy Analysis & Management

Panel: Direct and Indirect Impacts of Medicaid Policy Changes on the Family

(Health Policy)

Medicaid provides health insurance coverage to low-income individuals and families. Although the program is funded by both state and federal governments, each state is in charge of managing its own program, creating variation in eligibility and generosity of Medicaid-provided health insurance by state. Additionally, state policymakers can alter how (and how much) providers of Medicaid patients are reimbursed. Whereas a state might change provider payment structures in order to directly affect the health of its Medicaid population, changes in eligibility thresholds may indirectly affect familial decisions that are sensitive to finances. This panel brings together three papers that examine direct and indirect effects of such policy changes on families. In particular, we look at how changes to Medicaid have impacted key aspects of family life—union formation, the decision to have another child, and perinatal outcomes. Each paper in the panel contributes to the important body of literature that revolves around the role of public policy on the family. The first paper considers how changes in Medicaid eligibility and creation of health insurance exchanges have affected individuals’ health insurance options and cost of these options, which in turn, have modified union formation among nonelderly Americans. Results suggest that the incentives to marry for low-income nonelderly adults are stronger in Medicaid expansion states. Findings are especially important for low-income nonelderly adults given the stabilizing effects of both marriage and health insurance for low-income populations, and the negative economic consequences of divorce. Similarly, the second paper examines indirect effects of public policy on family by investigating the large-scale Medicaid expansions to pregnant women during the 1980s to determine the impact of increased public insurance access on birth parity, especially higher-order births. While the decision to become a parent (i.e., the extensive margin) appears to be unaffected by the policy changes, preliminary findings suggest that increased access to public health insurance positively influenced the number of 2nd, 3rd, or 4th births (i.e., the intensive margin) for select groups of women. Paper number three evaluates the Medicaid “hard-stop” policy in Texas, which denies reimbursement to providers for early elective (non-medically necessary) deliveries of babies. The authors find large reductions in rate of early elective deliveries, including cesarean sections, as well as increased gestational age and gestational weight.