Transitional Medical Assistance: Does “Welfare to Work” Work for Medicaid?
In this paper, I will contribute two central pieces to our understanding of the interaction between the health insurance safety net and the labor market. First, I will provide an in-depth descriptive analysis of the types of Medicaid enrollees who use TMA benefits, how long they use TMA benefits, and an overview of their historical transition rates to work, which has never previously been documented. Second, I will use the TMA program to study the effect of a relative increase in the marginal cost of returning to work on the probability of returning to work as well as the level of earnings in the job that the worker transitions to. In particular, I will take advantage of a new program in Wisconsin, implemented in 2012, that charges substantial premiums to some TMA beneficiaries, to study to what extent Medicaid enrollees are responsive to changes in the marginal cost of transitioning back to work. I will use a set of matched administrative data from the state of Wisconsin to estimate regression discontinuity models that rely on an enrollee’s precise family income, which determines both whether they qualify for TMA and what exactly the premium will be. This research will help to resolve the question of whether policies designed to transition beneficiaries from `welfare to work’ are effective in the Medicaid context.