Medicaid and saving babies

As mentioned at the end of my prior post in the Medicaid-IV series Janet Currie and Jon Gruber published a 1996 paper on the effect of Medicaid expansion on infant mortality and birth weight. Here’s the abstract:

A key question for health care reform in the United States is whether expanded health insurance eligibility will lead to improvements in health outcomes. We address this question in the context of the dramatic changes in Medicaid eligibility for pregnant women that took place between 1979 and 1992. We build a detailed simulation model of each state’s Medicaid policy during this era and use this model to estimate (1) the effect of changes in the rules on the fraction of women eligible for Medicaid coverage in the event of pregnancy and (2) the effect of Medicaid eligibility changes on birth outcomes in aggregate Vital Statistics data. We have three main findings. First, the changes did dramatically increase the Medicaid eligibility of pregnant women, but did so at quite differential rates across the states. Second, the changes lowered the incidence of infant mortality and low birth weight; we estimate that the 30-percentage-point increase in eligibility among 15-44-year-old women was associated with a decrease in infant mortality of 8.5 percent. Third, earlier, targeted changes in Medicaid eligibility, which were restricted to specific low-income groups, had much larger effects on birth outcomes than broader expansions of eligibility to women with higher income levels. We suggest that the source of this difference is the much lower take-up of Medicaid coverage by individuals who became eligible under the broader eligibility changes. Even the targeted changes cost the Medicaid program $840,000 per infant life saved, however, raising important issues of cost effectiveness.

This study shares the same methodological approach, and many of the strengths and weaknesses of the Currie and Gruber paper I reviewed previously. So, I’m not going to repeat myself. There is one element of this study worth emphasizing, however. As stated in the abstract, the authors examined two types Medicaid expansions in the 1980s, one targeted and one broad.

The targeted expansions were essentially modest changes to Medicaid eligibility around the edges of the program’s ties to AFDC (I’m obviously grossly simplifying). The broad expansion began in 1987 and liberalized the income cutoffs for pregnant women. By 1990 all states were required to cover pregnant women with incomes up to 133% of poverty and had the option of extending coverage up to 185% of poverty with federal matching funds.

Results of the study differ across the two types of expansions. The targeted expansion had much stronger effects:

[W]e find that a 30-percentage-point increase in eligibility under targeted programs would have been associated with a highly significant 7.8 percent decline in the incidence of low birth weight; a similar increase in eligibility under the broad programs would have decreased the incidence of low birth weight by only 0.2 percent. Similarly, a 30-percentage-point increase in targeted eligibility would have been associated with an 11.5 percent decline in infant mortality, compared to a 2.9 percent decline under the broad policy changes.

The authors attribute this difference in outcomes across type of expansion to different rates of take-up. Lower take-up under the broad expansion attenuated its effect. To the extent that these findings can be generalized, they would seem to suggest that the broad Medicaid expansion under the ACA will have relatively small effects on health. However, the ACA’s expansion comes with an individual mandate, so take-up should occur at a much higher rate than under the broad expansions in the 1980s.

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