Got Health? Advertising, Medicaid and Child Health

Anna Aizer, Princeton University

Of the ten million children without health insurance in 1996, nearly half were eligible for Medicaid but not enrolled. Little is known about the reasons low-income families fail to enroll in public programs that involve no out of pocket costs, such as Medicaid, or the consequences of failing to enroll. I examine the factors affecting Medicaid enrollment and the potential benefits of increased enrollment using an exogenous change in local outreach efforts in California that lowered the information costs and administrative hassles associated with enrollment. I find that information and administrative costs are significant deterrents to enrollment, with the former limited to new families, and that these costs are greater for those with language and/or immigration concerns. Furthermore, enrolling children early in Medicaid leads to a more efficient allocation of health care resources by promoting primary ambulatory care over more expensive hospital based care resulting in fewer avoidable hospitalizations.