NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Does Public Insurance Crowd Out Private Insurance?

David M. Cutler, Jonathan Gruber

NBER Working Paper No. 5082
Issued in April 1995
NBER Program(s):   HC   HE   PE

One popular option for health care reform in the U.S. is to make particular groups, such as children, eligible for public health insurance coverage. A key question in assessing the cost of this option is the extent to which public eligibility will crowd out the private insurance coverage of these groups. We estimate the extent of crowdout arising from the dramatic expansions of the Medicaid program during the 1987-1992 period. Over this time period, Medicaid eligibility for children increased by 50 percent and eligibility for pregnant women doubled. We estimate that between 50 percent and 75 percent of the increase in Medicaid coverage was associated with a reduction in private insurance coverage. This occurred largely because employees took up employer-based insurance less frequently, although employers may have encouraged them to do so by contributing less for insurance. There is some evidence that workers dropped coverage for their family and switched into individual policies.

download in pdf format
   (793 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (793 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w5082

Published: Quarterly Journal of Economics, May 1996, 111(2), pp.391-430 citation courtesy of

Users who downloaded this paper also downloaded these:
Gruber and Simon w12858 Crowd-Out Ten Years Later: Have Recent Public Insurance Expansions Crowded Out Private Health Insurance?
Mulligan and Sala-i-Martin w5016 Measuring Aggregate Human Capital
Gruber and Madrian w4469 Health Insurance Availability and the Retirement Decision
Currie and Gruber w5052 Health Insurance Eligibility, Utilization of Medical care, and Child Health
Kaplan and Zingales w5267 Do Financing Constraints Explain Why Investment is Correlated with Cash Flow?
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us