In this paper, the authors examine the effects of recent parental Medicaid eligibility expansions on Medicaid participation and private insurance coverage. They present a new approach for estimating these policy effects that explicitly models the particular policy instrument over which legislators have control–income eligibility thresholds. Their approach circumvents estimation problems stemming from misclassification or measurement error. Moreover, it allows the authors to assess how the policy effects may vary at different initial threshold levels.

Using data from the Survey of Income and Program Participation, the authors find three main results. First, the eligibility expansions result in significant increases in Medicaid participation; a “typical” expansion increases Medicaid participation by about four percent of baseline coverage rates. Second, the participation effect is larger for lower initial thresholds and the effect decreases as Medicaid thresholds increase. Third, they find no statistically significant evidence of crowd out regardless of initial threshold level.