Potential beneficial Financial Effects of Medicaid/SCHIP Crowd-Out for Low-Income Families. Colleen Grogan, University of Chicago, Harold Pollack, University of Chicago, and Luke Shaefer, University of Chicago.

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This proposed research seeks to understand the effects of so-called ‘crowd-out’ (rejecting or dropping employer-based insurance in favor of public insurance) among low-income families. Prior studies of crowd-out focus on estimating the size of the phenomenon; that is, determining the extent to which increases in Medicaid and SCHIP enrollment is due to individuals dropping private coverage. Such research considers the social costs, but implicitly ignores the potential social benefits of substituting public for private coverage. This project attempts to shed light on the meaning of various crowd-out estimates in three main ways: (1) estimate the effect of crowd-out on out-of-pocket medical expenditures and medical utilization; (2) estimate the effect of crowd-out on wages; and (3) estimate the effect of crowd-out on work arrangements. To analyze these effects, we will use the 2001 and 2004 SIPP data. Reduced-form and fixed-effects regression specifications will be used to examine medical expenditures, utilization and wages, whereas multinomial logistic regression specification will be used to examine the effect on work arrangements.