Contemporaneous and Long-Term Effects of Children's Public Health Insurance Expansions on Supplemental Security Income Participation

DRC Working Paper Number: 2018-03
Publisher: Princeton, NJ: Mathematica Policy Research
May 30, 2018
Authors
Michael Levere, Sean Orzol, Lindsey Leininger, and Nancy Early

Key Findings:

  • Increased Medicaid generosity for children leads to reductions in SSI applications and awards in states where SSI recipients did not automatically receive Medicaid. A 10 percentage point increase in the estimated share eligible for Medicaid (or 21 percent relative to the mean) was associated with an 11 percent decrease in SSI applications. We attribute the difference in findings to the higher transactions costs associated with entering Medicaid via SSI in such states.
  • In the long run, increased Medicaid eligibility during childhood appears to reduce adult SSI applications to some extent, consistent with recent findings that Medicaid coverage in youth improves adult health and economic outcomes. We found that one more year of eligibility during childhood reduced SSI applications by about 3 percent for those ages 20 to 28.
This study explores the interplay between two important public programs for vulnerable children: Medicaid and the Supplemental Security Income (SSI) program. Medicaid eligibility for children expanded in the late 1990s and early 2000s, primarily due to the creation of the Children’s Health Insurance Program (CHIP). We use a measure of simulated eligibility as an exogenous source of variation in Medicaid generosity to identify the effects of Medicaid eligibility expansions on SSI outcomes. Simulated eligibility varies over states and time only because of state-specific Medicaid thresholds. On average, increases in Medicaid eligibility did not affect contemporaneous youth SSI applications or awards. However, in states where SSI recipients did not automatically receive Medicaid, expansions in public health insurance coverage led to a significant decrease in both applications and awards. We attribute the difference in findings to the higher transactions costs associated with entering Medicaid via SSI in such states. An alternative route to Medicaid coverage might be particularly appealing to potential SSI applicants in these states. In the long-term, we find that increased Medicaid eligibility during childhood reduces young adult SSI applications to some extent, consistent with recent findings that Medicaid coverage in youth improves adult health and economic outcomes.