Accounting for the Impact of Medicaid on Child Poverty

Abstract

US Census Bureau poverty measures do not include an explicit need for health care or insurance nor do they consider health insurance benefits to be resources. Consequently, they cannot measure the direct impact of health insurance benefits on poverty. This paper reviews conceptual and practical considerations in incorporating health benefits and needs into poverty measures. We analyze the advantages and disadvantages of various approaches including variants of the Official Poverty Measure (OPM); the Supplemental Poverty Measure (SPM); using a threshold with medical out-of-pocket (MOOP) expenditures; a Medical Care Expenditure Risk (MCER) Index; willingness to pay (WTP) for Medicaid; and the Health-Inclusive Poverty Measure (HIPM; Korenman and Remler 2016). We present estimates of Medicaid’s impacts on child poverty, based on the HIPM. This paper was prepared as a background paper for the Committee on Building an Agenda to Reduce the Number of Children in Poverty by Half in 10 Years, of the Board of Children, Youth and Families of the National Academy of Sciences. The paper was submitted in October 2017 and embargoed until the release of the Committee’s report, A Roadmap to Reducing Child Poverty, in March of 2019.