Does Subsidized Public Health Insurance for Parents Improve Children’s Human Capital and Close Achievement Gaps?
Discussant: Agustina Laurito
The Affordable Care Act (ACA) expanded Medicaid eligibility to adults earning less than 138 percent of the Federal Poverty Level (FPL) in participating states. Researchers have demonstrated that the ACA Medicaid expansions: (1) increased parental health insurance coverage and reduced the proportion uninsured; (2) increased children’s health insurance coverage and decreased the proportion of children uninsured; (3) improved adult healthcare access; (4) improved parental mental health (5) reduced out-of-pocket spending; and, (6) reduced debt collections, medical debt collections, and improved credit scores
These impacts of the ACA Medicaid expansions on parents have the potential to affect their children’s human capital development and, in turn, their lifetime wellbeing. Previous research has shown that reducing uninsured rates among children is associated with improvements in educational achievement (Levine and Schanzenbach 2009; Cohodes et al. 2016). Additionally, improvement in families’ financial circumstances that have resulted from the ACA expansions can be used to invest in children. Research has demonstrated that policy interventions that have raised family income have beneficial spillover effects on children’s human capital development (Dubay and Kenney 2003; Aizer and Grogger 2003; Dahl and Lochner 2012; Bastian and Michelmore 2018; Hamersma, Kim, and Timpe 2018; Wherry, Kenney, and Sommers 2016). For example, Dahl and Lochner (2012) found that children of parents who received the EITC credit scored higher on math and reading tests, with particularly large improvements experienced by lower-income children. Less financial stress has also been associated with improvements to parental physical and mental health that can have beneficial effects for children (Propper, Rigg, and Burgess 2007; Yamauchi 2009; Podor and Halliday 2012; Bratti and Mendola 2014; Mühlenweg, Westermaier, and Morefield 2016). Importantly, evidence reported in McMorrow et al. (2017) suggests that the ACA Medicaid expansion reduced parental mental stress.
We study the effects of the Affordable Care Act (ACA) Medicaid expansions on 3rd through 8th grade mathematics and reading achievement using data from all counties in the United States. Because Medicaid is targeted at low-income families, and because race/ethnicity is an important indicator of low income, we also examine whether the expansions diminished socioeconomic and racial/ethnic gaps in achievement. We explain the potential mechanisms behind any effects of Medicaid on achievement that are found. There are several mechanisms that link the expansions to child development, including increased family income and better access to health care for all family members. Accordingly, we assess the impact of Medicaid expansion on child healthcare access and utilization, child wellbeing, family medical care expenditures. We estimate the extent to which any of these mechanisms explain potential differences in achievement and achievement gaps.
