Does Expanding Public Insurance Prevent Material Hardship for Families With Children?

Abstract

The 1997 Children’s Health Insurance Program (CHIP) provided states with funding to expand public insurance to children in low-income families. Recent studies suggest CHIP improved family finances, but it is unknown whether CHIP specifically affected the prevalence of material hardships such as food and housing insecurity. This study uses cross-sectional data on low-income children from the National Survey of American Families (1997-2002) to examine the impact of CHIP on material hardships. Using an instrumental variable that exploits variation in income eligibility cutoffs across states and years, I find that households gaining CHIP eligibility did not experience significant changes in material hardship. CHIP significantly reduced the prevalence of postponed care for the subgroup of households close to the poverty line. For low-income families with children, public health insurance may play a larger role in increasing access to care than in supplementing the budget for necessities.