How do public health expansions vary by income strata? Evidence from Illinois' All Kids program.

ABSTRACT

This paper examines how income levels affected the substitution of public health insurance for private health coverage under expansions of Illinois' State Children's Health Insurance Program (SCHIP). Building on a technique developed by Abadie and Gardeazabal (2003), I estimate that among children whose family incomes are between 200% and 300% of the federal poverty level (FPL), 35% of those covered by SCHIP would have retained private coverage in the absence of SCHIP. Significant substitution also appears between 300% and 400% FPL, but surprisingly I find evidence that the introduction of SCHIP caused an increase in private health insurance coverage for those with family incomes between 400% and 500% FPL.