The Long-Term Impacts of Medicaid

Little evidence exists on the long term impact of public programs that target childhood health. Long-term impacts could be an important but underappreciated component of program benefits. This paper examines the long term reach of Medicaid on health and socioeconomic status by leveraging the program’s gradual adoption across the states, which occurred mainly between 1966 and 1970. This natural experiment created variation in cumulative exposure to Medicaid for birth cohorts that are now in midlife. Exposure is a function of date of birth, place of residence, and childhood economic circumstances. Results suggest that exposure to Medicaid in childhood (age 0-5) among subgroups targeted by the program is associated with statistically significant improvements in adult health (age 18-54). Medicaid improves an index of chronic health conditions by 0.3 to 0.7 standard deviations. We find no evidence for a socioeconomic effect. Estimates are robust to the inclusion of a detailed set of controls measuring the health care market and public policy environment and we find further support for the study design by observing null effects in placebo groups. Results suggest adult health is sensitive to the availability of health insurance during early childhood and that the full value of the Medicaid exceeds its immediate benefits.