While Medicaid is currently financed by open-ended matching, in which the federal government pays an uncapped percentage of program expenditures, there has been interest in trans-forming the financing structure to block grants, which limits federal cost-sharing to a fixed amount. To understand the implications of this reform, I measure the effect of match rates on Medicaid spending by using the variation induced by a kink in the match rate formula. I find that a percentage point increase in the federal match raises per-beneficiary spending by 3 percent. Using this estimate, I discuss the welfare impact of a block grant reform.
Federal legislation passed in the late 1980s greatly expanded the potential coverage of the Medicaid
program to include children in families with incomes at and slightly above the poverty threshold,
including families with two parents and working parents. Prior to these expansions, the
distribution of health insurance coverage in the population of children was distinctly U-shaped,
with children in the second and third income deciles having the lowest levels of coverage. In this
paper I evaluate the impact of the expansions on the distribution of coverage both by income class
and by region. I ﬁnd that the expansions served to reduce the variation in insurance coverage,
raising coverage levels substantially for low-income children and children in historically low-
coverage regions. Using the fact that the impact of the legislation varied regionally and by income
decile, I explore whether the fall in private coverage that occurred in the late 1980s and early
1990s could be attributed to the expansions. I conclude that the decline in private coverage was
unlikely to have arisen as a result of the expansions.
Federal legislation passed in the late 1980s greatly expanded the potential coverage of the
Medicaid program. Whereas in 1985 Medicaid was essentially limited to mothers and children
on AFDC, by the early 1990s eligibility was expanded to include all children born after 1983 in
poor families, regardless of family structure or income sources. In this paper I evaluate the
effects of these expansions on Medicaid coverage and overall health insurance coverage of low-
income children. Growth in Medicaid enrollment between 1988 and 1993 is decomposed into
three underlying sources: changes in the eligibility rules of the program; changes in the eligibility
characteristics of the population; and changes in takeup among the eligible. l ﬁnd that about 68
percent of the 6.7 percentage point rise in coverage rates is attributable to the expanded eligibility
rules. While the expansion of Medicaid eligibility may have increased Medicaid enrollment, an
important question is whether the increase represented a net gain in health insurance coverage, or
a substitution from private to publicly-provided coverage. I employ between-state variation in the
impact of the federally-mandated expansions to measure the potential "crowding out" of private
health insurance by public insurance. I ﬁnd little evidence of crowding out: instead, the
Medicaid expansions seem to have maintained overall health insurance coverage rates against a
backdrop of declining private coverage.
Recent efforts to expand unemployment insurance (UI) eligibility are expected to increase low-earning workers’ access to UI. Although the expansion’s aim is to smooth the
income and consumption of previously ineligible workers, it is possible that UI benefits simply displace other sources of income. Standard economic models predict that UI delays reemployment, thereby reducing wage income. Additionally, low-earning workers are often eligible for benefits from means-tested programs, which may decrease with UI benefits. In this paper, we estimate the impact of UI eligibility on employment, means-tested program participation, and income after job loss using a unique individual-level administrative data set from the state of Michigan. To identify a causal effect, we implement a fuzzy regression discontinuity design around the minimum earnings threshold for UI eligibility. Our main finding is that while UI eligibility increases jobless durations by up to 25 percent and temporarily lowers receipt of cash assistance (TANF) by 63 percent, the net impact on total income is still positive and large: In the quarter immediately following job loss, UI-eligible workers have 46-61 percent higher incomes than ineligibles.