Public Health Insurance, Program Take-Up, and Child Health

Of the ten million uninsured children in 1996, nearly half were eligible for Medicaid, the public health insurance program for poor families, but not enrolled. In response, policy efforts to improve coverage have shifted to increasing Medicaid take-up among those already eligible rather than expanding eligibility. However, little is known about the reasons poor families fail to use public programs or the consequences of failing to enroll. The latter is of particular relevance to Medicaid given that children are typically enrolled when they become sufficiently sick as to require hospitalization. Using new data on Medicaid outreach, enrollment and child hospitalizations in California, I find that information and administrative costs are important barriers to program enrollment, with the latter particularly true for Hispanic and Asian families. In addition, enrolling children in Medicaid before they get sick promotes the use of preventative care, reduces the need for hospitalization and improves health.