Welfare Reform and the Health Insurance Coverage of Women and Children

Abstract

There is tremendous interest in understanding the effects of welfare reform enacted by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Our interest lies in one possible consequence of welfare reform: the loss of health insurance.This paper advances the literature by utilizing the 1992-1996 panels of the Survey of Income and Program Participation, matching type of insurance coverage to the presence of waivers from AFDC or TANF implementation in each state in specific months. We utilize a difference in differences method. Specifically, we estimate the difference before and after welfare reform in the insurance coverage of women and children who were likely to be eligible for welfare compared to those who were likely to be ineligible for welfare.We find that AFDC waivers prior to 1996 and the implementation of TANF after 1996 raised the probability that welfare-eligible women lack health insurance coverage. Specifically, TANF implementation is associated with a 7.8 percent increase in the probability that a welfare-eligible woman was uninsured. Welfare reform had less of an impact on the health insurance coverage of children. We find no evidence that AFDC waivers increased the probability that welfare-eligible children were uninsured. However, TANF implementation was associated with a 2.8 percent increase in the probability that a welfare-eligible child lacked health insurance.