Background: Many Medicaid-eligible children are not enrolled in Medicaid and are not covered by private insurance. Reducing persistent lack of insurance for children requires a better understanding of why Medicaid-eligible children do not participate.
Research questions: Does the availability of free or low-cost medical services substitute for Medicaid or private insurance enrollment among Medicaid-eligible children? Does the availability and affordability of insurance coverage, particularly the offer of employer-sponsored insurance (ESI) and the presence of managed care, affect child insurance coverage?
Research design: We use data from the National Health Interview Survey for 1994 and 1995, supplemented with county level measures of insurance and provider supply, to estimate a multinomial choice model of insurance coverage among children identified as Medicaid-eligible. We focus on county supply of public hospitals and community/migrant health centers (C/MHC); and the availability and cost of ESI. We control for child and parent characteristics.
Results: A positive effect of C/MHC supply is found on Medicaid enrollment, but no evidence is found of substitution between low-cost providers and Medicaid or private coverage. Local availability of ESI and private HMO penetration increased private insurance enrollment.
Conclusions: Local community providers can play an important role in outreach and enrollment for Medicaid. Availability and cost of ESI constrain private coverage for Medicaid-eligible children. Policies that encourage offers of insurance coverage by employers, decrease premiums, and encourage adoption of managed care could have important positive effects on coverage for this population.