Public health insurance and medical treatment: the equalizing impact of the Medicaid expansions

We investigate the impact of expanding public health insurance on the medic al treatment received by women at childbirth, using Vital Statistics data o n every birth in the US over the 1987-1992 period. The effects of insurance status on treatment are identified using the tremendous variation in eligi bility for public insurance coverage under the Medicaid program over this p eriod. Among low education mothers who were largely uninsured before being made eligible for Medicaid, eligibility for this program was associated wit h significant increases in the use of a variety of obstetric procedures. Am ong women with more education, however, there is a countervailing effect on procedure use. Most of these women had private insurance before becoming M edicaid-eligible, and some may have been 'crowded out' onto the public prog ram, moving from insurance which reimburses medical care more generously to insurance with much less generous reimbursement. This movement was accompa nied by reductions in procedure use. Thus, on net, the Medicaid expansions had an equalizing effect, increasing the treatment intensity of the previou sly uninsured while lowering it among the previously insured. (C) 2001 Else vier Science B.V. All rights reserved.