Saving Babies: The Efficacy and Cost of Recent Changes in the

Medicaid Eligibility of Pregnant Women

Janet Currie

Jonathan Gruber

Main Question

Will the extension of health insurance to the uninsured improve their health?

Expansions in eligibility for insurance may not result in increases in insurance coverage increases in utilization of care improvements in health

Is it really cost-effective to expand the eligibility of insurance?

This paper employs dramatic changes in Medicaid eligibility for pregnant women that took place between 1979 and 1992.

The extensions of eligibility groups provide a natural experiment to ask Does the change of Medicaid eligibility lower the

incidence of infant mortality and low birth weight? Does the change of Medicaid eligibility increase

the medical use? Does the change of Medicaid eligibility increase

the prenatal care?

Medicaid eligibility trends

由 CPS 資料抽樣， 1980 (col1.2) 及 1987 (col 3.4) ，算這些樣本的平均

Col 2.4 是將這些樣本套入 1992 年的法規 , 找出符合Medicaid 條件者 , 再算這群的平均 . Col 4 已扣除符合target criteria 者

Target change 和 Broad change 是特徵差異很大的兩群人

Data

Current Population Survey (CPS) Medicaid eligibility

Vital Statistics data Infant mortality rate Low birth weight

Health Care Financing Administration (HCFA) Medicaid expenditure

National Longitudinal Survey of Youth (NLSY) Prenatal care use

Infant mortality over time

Low birth weight over time

Low birth weight

Low Birth Weight:<2500g 死亡率較高 (10-15X)

Very Low Birth Weight:600-1300g 多 100g, 減少 10% 死亡

9% 住院人口 ; 57% 醫療支出 住院費 9712USD: 678USD 救活 LBW 花費較多且後續照顧也較難

經由適當產檢可減少 LBW ( 找出可能早產的孕婦 , 早期發現胎兒在子宮內生長遲緩 )

Estimation

The effect of the eligibility changes on birth outcomes low birth weight (less than 2,500 grams) infant mortality rate in each state and year.

Regress these two (state/ year) outcomes on the fraction of 15-44-year-old women in the event of pregnancy with Medicaid coverage.

OLS Problem

Problem of this strategy is that the actual fraction eligible depends on the economic and demographic characteristic of the state, which may also be correlated with birth outcomes.

For example, a state recession is associated with both increases in eligibility and a higher incidence of low birth weight. Then this situation could induce a spurious effect. (biased estimation, due to omitted variables. )

Solution: IV

The authors instrument the actual fraction eligible of Medicaid in a state and year that depends only on the state’s eligibility rules.

The backbone of the methodology is a simulation model of each state’s Medicaid eligibility for pregnant women over the 1979-92 period.

Solution: IV

To create the instrument, the authors first take 3,000 women from CPS in each year. Then, they calculated the fraction of eligible women for Medicaid in this sample.

The instrumental fraction depends only on the legislative environment and is independent of other characteristics of states.

The final analysis also employed the state fixed effects regression to control the state characteristics and Medicaid policy.

The point estimation of instrument regression suggests that a 30-percentage-point in eligibility increase (rough rate of actually happens over this time period) would lead to a reduction of 1.9 percent of the incidence of low birth weight. ( .3*4.347/68.12 =.019)

The instrument regression of the target group indicates that the 30% point in eligibility rise was associated with an 7.8 percent decline in the incidence of low birth weight.

The result for the broad group is only 1.5 percent reduction.

In column 4 part B, the instrumental variables regression of ‘the target’ indicates that the 30-percentage-point rise was associated with an 8.5 percent decline in the infant mortality rate.

the result for ‘the broad’ is only 2.2 percent decrease of the infant mortality rate in part C.

The column 5 and 6 are the y incidence combined both the low birth weight and the infant mortality rate.

Robustness Issue:

Results are similar to those in the table 3, but the coefficients are slightly smaller.

The only significant changes is the overall results for low birth weight are no longer statistical significant.

How much is the take-up?

The March CPS asks individuals whether they were covered by Medicaid in the previous year.

The authors estimated the marginal take-up rate for these Medicaid policy change; Of women 15-44 years old, about 11.4 percent of all women were pregnant at some point during one year of the authors’ sample years (the years of changing policy); this is the baseline rate (i.e. if the full take-up, the rate is 0.114.)

The Medicaid policy makes an extra woman covered will raise the odds that she will be covered by 3.9 percent. Relative to the baseline, this is a take-up rate of 34 percent (34% = 3.9/11.4).

Reasons for low ‘broad’ take-up rate

The ‘broad’ population was less needy. The broader policy changes may have been less

effective. It may be difficult to bring women who have never received any social assistance into the Medicaid program, either they do not know about it or the stigma effects. Previous research report that many low-income families and their physician are unaware that they can qualify for Medicaid

The Cost Effectiveness:

The authors normalize and deflate health expenditure by Consumer Price Index and use the dollars in 1986.

For example, the coefficient in the col. 2 refers to the actual fraction made eligible of all expenditure under the targeted change. (notice that: .301= .092+ .171+ .038)

The Cost Effectiveness

The majority of the spending comes through inpatient hospital costs.

The most striking finding (from the simulated models) is that spending per ‘broad’ eligible is actually higher than spending per ‘target’ eligible. (the richer use more than the poorer)

Among targeted eligible, only about half of the spending is on inpatient hospital services, whereas among broad eligible, over 90 percent of spending is on these services.

The cost of saving a infant’s life

Estimated increase of actual expenditure is $202 per year per additional eligible women. $224 per targeted eligible per year.

This leads the cost of saving a life through targeted eligibility changes was $840,000. (if interested, check with the footnote 22 for details)

The cost of saving a infant’s life:

Increase 1% target eligibility, reduce annual infant mortality: 0.041/1000

1% eligibility means providing coverage to 153.85 pregnant women, costing $34462. In other words, saving an infant’s life costs 34462/0.041=840536 (0.84 million)

Increase 1% broad eligibility reduces annual infant mortality: 0.01/1000. In other words, saving a infant’s life cost 4.2 millions

According to the other research (Tengs et al, 1995) , the child restraint system in cars costs about $5.5 million per child life saved.

The similar prenatal care program also costs $1.06 million to save a life according the Institute of Medicine.

Parental Care Utilization analysis by NLSY:

Instrumental eligibility is using the actual and simulated fractions by the CPS. Linear probability models is employed in this analysis.

OLS in col. 1 says the targeted Medicaid-eligible women are likely to delay prenatal care, but the instrumental models say otherwise.

Actually, the targeted group reduced the probability of delay by almost the half when the simulated instrument is used (in col. 3).

Conclusion

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, 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. Even the targeted changes cost the Medicaid program $840,000 per infant life saved, however, raising important issues of cost effectiveness.

Medicaid

1965 開始，針對小孩 , 孕婦 , 符合條件的小孩父母…… . 開始時須加入 AFDC (Aids to Families with

Dependent Children) 每年花費 240 億美金 非常非常窮的家庭 (1979, Texas, 貧窮線 24%)

1980 年起 , Medicaid 針對孕婦放寬條件

Two Medicaid Eligible Groups

“Targeted changes” applied to specific low-income groups changes in eligibility for cash welfare under AFDC

program changes that allowed pregnant women with

income below AFDC cutoff to receive Medicaid regardless of family structure ( i.e. the single parent).

“Broad changes” extended Medicaid coverage all women with income less than specified level

(e.g., 185 percent of the federal poverty level) minus the people in group 1.

Two Medicaid Eligible Groups

Target change: 針對低收入者 孕婦 初產婦 ( 未超過 AFDC 收入 ) 青少女懷孕 ( 未超過 AFDC 收入 ) 雙親家庭 ( 未超過 AFDC 收入 ) medically needed ( 超過 AFDC 收入 )

Broad change: 1987/4 對孕婦的收入條件大大放寬 ( 超過 AFDC 上限 ),

也不再限制家庭結構 1990/4 建立統一的最低收入標準 ( 收入在貧窮線 133% 以

下的孕婦都可以納保 ), 某些州會達到貧窮線的 185% 甚至更高

14 年間 , 12.4-44.3%

經濟蕭條 , 較多女性符合medicaid 條

件

Broad change,

1987-1992增加 100%

The women in “broad changes” group have much higher income than group “targeted changes”. For example, in Texas, the cutoff of AFDC for a family of four was only 24 percent of the poverty line in 1979.

By April 1990, a uniform minimum threshold had established: all states were required to cover pregnant women with incomes up to 133 percent of the property line. States have the matching option to cover up to 185 percent. Some states had even cover beyond that by state-only funds.