The Effect of the State Children's Health Insurance Program on Health Insurance Coverage

This paper presents the first national estimates of the effects of the SCHIP expansions on insurance coverage. Using CPS data on insurance coverage during the years 1996 through 2000, we estimate two-stage least squares regressions of insurance coverage. We find that SCHIP had a small, but statistically significant positive effect on insurance coverage. Our regression results imply that between 4% and 10% of children meeting income eligibility standards for the new program gained public insurance. While low, these estimates indicate that states were more successful in enrolling children in SCHIP than they were with prior Medicaid expansions focused on children just above the poverty line. Crowd-out of private health insurance was estimated to be in line with estimates for the Medicaid expansions of the early 1990s, between 18% and 50%.