Saving Babies: The Efficacy and Cost of Recent Changes in the Medicaid Eligibility of Pregnant Women
JOURNAL OF POLITICAL ECONOMY, Vol, 104, No. 6 (December 1996)
Posted: 19 May 1998
We provide direct evidence on the effect of health insurance on health outcomes by examining the dramatic increases in the eligibility of pregnant women for the Medicaid program between 1979 and 1992. We find that the 30-percentage-point rise in Medicaid eligibility significantly lowered the incidence of low birth weight and infant mortality. Targeted changes in Medicaid eligibility that 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 because of much lower take-up of this entitlement by the latter group. Even the targeted changes cost the Medicaid program $840,000 per infant life saved, however, raising important issues of cost effectiveness.
JEL Classification: I12, I18
Suggested Citation: Suggested Citation