Welfare reform and health insurance of immigrants

Health Services Research,  June, 2005  by Neeraj Kaushal,  Robert Kaestner

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(11.) Note that the comparison group approach is used to control for unmeasured determinants of health insurance and that many, if not most, of the important determinants of Medicaid that vary by state-year such as Medicaid income eligibility level and strength of the economy (unemployment rate) are held constant. The models also include state effects, state-specific trends and personal characteristics, and so the omitted variable problem may not be severe.

(12.) A quarter of the sample in the analysis on the foreign-born consists of citizens. We also repeat the analysis by limiting the sample to foreign-born noncitizens. The results do not differ, which is indicative of some evidence of the chilling effect.

(13.) In the analysis, persons covered by CHAMPUS or Indian Health Service are excluded from both public and private insurance categories.

(14.) We thank Aaron Yellowitz for providing us with the Medicaid income eligibility data.

(15.) We decided to introduce time-effects as a quadratic state-specific trend because there is a high degree of collinearity between the policy variable and year effects. A regression of policy on state and year fixed effects yields an [R.sup.2] of 0.91. To test the validity of our model, we first estimated a model with year effects and then a model with state-specific quadratic trends. The second model used 102 parameters to measure state-specific time effects while the first used eight parameters (for 8 years). An F-test rejected the first model.

(16.) Our estimates would be biased if the post-1996 immigrants chose to stay in states that provide them benefits. To see whether our estimates carry that bias we redo the entire analysis after excluding from the sample individuals who arrived in the U.S. after 1996. The results are similar to what we obtain with the full sample including post 1996 immigrants. This is expected as research shows that new immigrants do not choose their state of residence on the basis of benefit availability (Kaushal 2005). This is also an indicator that the results presented here are not driven by the presence of post-PRWORA immigrants in the sample.

(17.) We repeated the above analysis on native-born women to test if there are systematically different trends across states that have substitute programs for post-1996 immigrants (replacement states) and those that have not chosen to provide substitute programs for post-1996 immigrants (nonreplacement states). We found that Medicaid use of low-educated, unmarried women living in nonreplacement states, declined by a statistically significant 4.1 percentage points; of those living in replacement states Medicaid use fell by a statistically insignificant 1.6 percentage points. The proportion without insurance in nonreplacement states rose by 1.9 percentage points and remained unchanged in replacement states. The differences in estimated effects for women living in replacement and nonreplacement states were statistically significant. This may suggest that the non-replacement states were in general more aggressive in carrying out welfare reform as compared with the replacement states.