The Effect of SCHIP Expansions on Health Insurance Decisions by Employers

Abstract

This study uses repeated cross-sectional data from the Medical Expenditure Panel Survey—Insurance Component (MEPS-IC), a large nationally representative survey of establishments, to investigate the effect of the State Children's Health Insurance Program (SCHIP) on health insurance decisions by employers. The data span the years 1997 to 2001, the period when states were implementing SCHIP. We exploit cross-state variation in the timing of SCHIP implementation and the extent to which the program increased eligibility for public insurance. We find evidence suggesting that employers whose workers were likely to have been affected by these expansions reacted by raising employee contributions for family coverage options, and that take-up of any coverage, generally, and family coverage, specifically, dropped in these establishments. We find no evidence that employers stopped offering single or family coverage outright.