This paper investigates the effects of expanding public health insurance eligibility for older children. Using data from the National Health Interview Surveys from 1986 to 2005, we first show that although income continues to be an important predictor of children's health status, the importance of income for predicting health has fallen for children 9–17 in recent years. We then investigate the extent to which the dramatic expansions in public health insurance coverage for these children in the past decade are responsible for the decline in the importance of income. We find that while eligibility for public health insurance unambiguously improves current utilization of preventive care, it has little effect on current health status. However, we find some evidence that Medicaid eligibility in early childhood has positive effects on future health. This may indicate that adequate medical care early on puts children on a better health trajectory, resulting in better health as they grow.
Children of wealthier parents are healthier than other children. This relationship is apparent in key indicators of child health, such as activity limitations, asthma, and mental health problems (Currie and Lin, 2007 and Newacheck, 1994). Poor health in childhood is likely to affect adult well-being both directly, through its effects on health, and indirectly, through inhibiting the child's accumulation of human capital. Since 17% of all U.S. children under age 18 live in families with income below the Federal poverty level, it is essential to have a better understanding of the mechanisms underlying the relationship between income and health (U.S. Bureau of the Census, 2004).
Expanding health insurance for low-income children continues to be a main goal of U.S. health policy for children. The primary policy tool aimed at meeting this goal has been liberalization of the eligibility criteria for public health insurance. Previous research has shown that expansions in eligibility of infants and young children for public health insurance have been effective in improving their health and access to care (Currie and Gruber, 1996b and Dafny and Gruber, 2005; Mathematica Policy Research Inc., et al., 2005).
This paper investigates the effects of expanding public health insurance eligibility on the health of older U.S. children. Older children are an especially interesting group because income becomes an increasingly important determinant of health as children grow older. We show, using data from the National Health Interview Surveys for 1986 to 2005, that the importance of income for predicting health has fallen for children 9–17 in recent years.
What explains this decline in the importance of income? It is natural to think of the dramatic expansions in public health insurance coverage for these children which have occurred over the past decade. If access to health insurance mitigates the health effects of low income, then one might expect to find that the relationship between income and health has weakened among the targeted older children. This improvement in health could stem either from the contemporaneous effects of gaining health insurance coverage, or from the lagged effects of having been covered at younger ages. Thus, in our analysis, we look at both present and lagged effects of public health insurance expansions.
The paper proceeds as follows. First, we present some background about the Medicaid expansions, describe the data, and document the reduction in the importance of income for the health of older children after 1996. Then, we explore the extent to which expansions of public health insurance eligibility to these children have been responsible for improvements in their health and access to care.
We find that while eligibility for public health insurance unambiguously improves current utilization of preventive care, it has little effect on current health status. However, we find some evidence that Medicaid eligibility in early childhood has positive future effects on health. This may indicate that adequate medical care early on puts children on a better health trajectory, resulting in better health at older ages.
Income continues to be an important predictor of child health status in the United States. However, the importance of income to the health of older children has diminished in recent years. Large expansions of public health insurance coverage to cover older children are a possible explanation. However, we find that while increases in contemporaneous Medicaid/SCHIP eligibility have strong effects on access to care, they do not increase the probability that an older child is in good health.
We suggest that this may be because health is a stock which reflects the results of cumulative investments, and offer suggestive evidence that children in states that had more generous policies in place when they were very young are healthier as 9–17 year olds. This may indicate that adequate medical care in early childhood puts children on a better health trajectory, resulting in better health at older ages. If this hypothesis is found to be correct, then it is consistent with a growing literature suggesting that conditions in early childhood, and even prenatally, matter for children's longer-term outcomes (Barker, 1998 and Heckman, 2007), and with the emerging literature in neuroscience and pediatrics that posits that “sensitive periods” for functions such as brain development occur prior to adolescence (Andersen, 2003 and Ito, 2004).
