Contemporaneous and Long-term Effects of Children’s Public Health Insurance Expansions on SSI

This study explores the interplay between two important public programs for vulnerable children: Medicaid and the Supplemental Security Income (SSI) program. Medicaid eligibility for children expanded in the late 1990s and early 2000s, primarily due to the creation of the Children’s Health Insurance Program (CHIP). We employ a generalized difference-in-differences design that takes advantage of the expansion of Medicaid and CHIP within states over time to isolate plausibly causal impacts of public health insurance eligibility on SSI outcomes. The key data sources for the study are the Current Population Survey and Social Security Administration’s Supplemental Security Record files.

On average, increases in Medicaid eligibility did not affect contemporaneous youth SSI applications or awards. However, in states where SSI beneficiaries did not automatically receive Medicaid, expansions in public health insurance coverage led to a significant decrease in both applications and awards. These results suggest that the newly available Medicaid/CHIP coverage – noteworthy for the relative ease of its application process compared with SSI – was an attractive potential substitute for SSI, especially among families that may have valued SSI primarily for the associated Medicaid benefit. In the long-term, we find that increased Medicaid eligibility during childhood reduces young adult SSI applications, consistent with recent findings that Medicaid coverage in youth improves adult health and economic outcomes.