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In late 1999, two years after introducing new work requirements to qualify for cash assistance and related support for child care and health insurance, Wisconsin implemented its State Children’s Health Insurance Program (SCHIP), known as BadgerCare. BadgerCare was one of only four SCHIP programs in the nation to expand coverage to parents as well as children, extending eligibility to low-income parents and children in families with incomes up to 185 percent of the federal poverty level. Adults with earnings at or below the cash assistance payment standard (roughly 57 percent of the federal poverty level) continue to be eligible for Medicaid. A study by Barbara Wolfe, Thomas Kaplan, Robert Haveman, and Yoon Young Cho, funded by the Economic Research Initiative on the Uninsured (ERIU), examines the effects of BadgerCare on health insurance coverage for a subset of the BadgerCare eligible population: single mothers who left cash assistance in the post-welfare reform period. They find that BadgerCare increased coverage levels substantially among these single mother cash assistance leavers.

The study focused on three cohorts of welfare leavers: single mothers leaving cash assistance during the last quarter of 1995, 1997, and 1999. Effects of BadgerCare were measured using the 1995 and 1997 cohorts, and three different estimation techniques.

Welfare Leavers in Later Cohorts Face Greater Barriers to Self Sufficiency

  • Welfare leavers in the 1997 and 1999 cohorts were younger, less educated, and had less work experience than those in the 1995 cohort. They also had more children and were more likely to have a disabled child. Because of these greater barriers, welfare leavers in these later cohorts were more likely to have incomes low enough to remain eligible for Medicaid, and therefore were not eligible for BadgerCare.

BadgerCare Increased Coverage Among Welfare Leavers

  • BadgerCare increased the rate of public coverage among single mother welfare leavers by an estimated 17 percentage points, based on difference-in-difference estimation which compared the 1995 and 1997 cohorts before and after BadgerCare.
  • Difference-in-difference estimation also shows that BadgerCare increased the rate of any coverage (public or private) among single mother welfare leavers by roughly 15 percentage points. This reflects a decline in private coverage offset by a relatively larger increase in public coverage.
  • The effects of BadgerCare were greater for the 1995 cohort, the more “job ready” group relative to the 1997 cohort. Public coverage was estimated to increase by between 24 and 29 percentage points for the 1995 cohort and by between 2 and 4 percentage points for the 1997 cohort. These estimates are based on pooled probit and random effects estimation models that control for factors other than BadgerCare that could influence coverage.

In many states, welfare reform led to a decline in public health insurance coverage. The experience with BadgerCare in Wisconsin indicates that expanding SCHIP eligibility to parents as well as children can increase public coverage with only modest offsets from declines in private coverage. Such programs provide important opportunities to promote coverage for populations most at risk of losing coverage due to welfare reforms.

The analysis is specific to the experiences in one state, Wisconsin, and to the details of the BadgerCare program. Although we would expect expansions in public coverage to parents and higher income groups leaving welfare to increase overall coverage, the magnitude of the effects may differ across states or programs.

The focus was on single mother families, the dominant type of family receiving cash assistance. The findings may not generalize to other types of families.

Private coverage is imputed using data from state unemployment records. Specifically, the authors assume that workers have private insurance if they are not enrolled in Medicaid or BadgerCare and they have worked full time for 2 quarters or more for a firm that has reported to the Unemployment Insurance System that it offers health insurance to its employees. Results were robust to two alternative ways of imputing private coverage.

Administrative data from the state of Wisconsin: the Client Assistance for Reemployment and Economic Support (CARES) system and the Computer Reporting Network (CRN) for information on AFDC and W-2, and Wisconsin’s Unemployment Insurance system for information on earnings and employers. The time period for the analysis is 1995-2001. The sample is comprised of women listed as the “case head” – meaning no father listed—who have at least one minor child, who received assistance under the AFDC or W-2 programs in September of 1995, 1997, or 1999, and who exited within the next 3 months and remained off welfare for at least 2 consecutive months.

Several methods are employed to estimate the effects of BadgerCare on the probability of public coverage: pooled probit estimation, logistic regression with random effects, and difference-in-difference estimation. Three cohorts of single mother welfare leavers are tracked on a quarterly basis from two years prior to leaving welfare through the end of 2001(25 quarters for the 1995 cohort, 17 quarters for the 1997 cohort, and 9 quarters for the 1999 cohort). An income-based algorithm is used to estimate eligibility for Medicaid and BadgerCare.

Extending Health Care Coverage to the Low-Income Population: The Influence of the Wisconsin BadgerCare Program on Insurance Coverage
Barbara Wolfe, Thomas Kaplan, Robert Haveman, and Yoon Young Cho
University of Wisconsin-Madison

Conference paper presented at ERIU Research Conference, July 2003

ERIU Working Paper #18 (Adobe PDF)

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Funded by The Robert Wood Johnson Foundation, ERIU is a five-year program shedding new light on the causes and consequences of lack of coverage, and the crucial role that health insurance plays in shaping the U.S. labor market. The Foundation does not endorse the findings of this or other independent research projects.