Causal Impact of Medicaid on Poverty: The Importance of Poverty Measures

Naomi Zewde
Rosemary Hyson, Baruch College, City University of New York (CUNY)
Dahlia Remler, Baruch College, City University of New York (CUNY)
Sanders Korenman, CUNY Institute for Demographic Research (CIDR)

Prior estimates of Medicaid’s impact on poverty have different shortcomings. Sommers and Oellerich (2013) estimated a causal effect of Medicaid on poverty, as measured by the supplemental poverty measure (SPM). However, the SPM captures poverty reduction due to reduced out-of-pocket spending but not due to meeting health care needs. Remler, Korenman and Hyson (2016) used a health inclusive poverty measure (HIPM), which captures health insurance needs and benefits, but their estimates do not incorporate individuals’ adjustments to health insurance coverage absent Medicaid. When we use CPS data and combine these approaches, we find Medicaid reduced HIPM poverty by 2.5 percentage points. The reduction in SPM poverty was 1.0 point and the accounting impact on HIPM poverty, 3.9 points. Among those who, absent Medicaid, would become uninsured, Medicaid reduced HIPM and SPM poverty by 6.4 and 1.2 percentage points, respectively. We also estimate demographic differences in Medicaid’s impact on poverty.

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 Presented in Session 193. Measuring Poverty