Woodwork Effects of Medicaid Expansions: Evidence from the Oregon Health Insurance Experiment

Although the literature on health insurance takeup has identified the possibility for woodwork effects, or enrollment spillovers onto the already-eligible, the magnitude of these effects is not well established. Large woodwork effects could compound the direct effects of health insurance expansions, leading to bigger coverage gains with additional (though uncertain) health benefits, financial risk reductions, and fiscal costs. We identify woodwork effects in the context of the Oregon Health Insurance Experiment, which randomized Medicaid eligibility to low-income adults in Oregon. Like other recent expansions of public health insurance, children of the newly eligible adults already qualified for free or low-cost health insurance. Our preliminary results point to large, economically meaningful woodwork effects: for example, for every 3.4 adults who ever enroll in Medicaid due to the expansion, 1 child enrolls in the program. Future analyses will explore the mechanism behind these findings and, relatedly, shed light on the relative importance of different theories of incomplete takeup, including incomplete information about eligibility, time costs of take-up, and familial learning about the value of Medicaid.