Saving Babies: The Efficacy and Cost of Recent Expansions of Medicaid Eligibility for Pregnant Women

Abstract

A major issue in the US health reform controversy has been whether extension of health insurance coverage to the uninsured will improve their health. This study examined infant mortality rates and low birth weight infants and the expansion of Medicaid coverage. The results of logistic models showed that Medicaid expansion to the narrowly targeted population contributed to a reduction of 7% in infant mortality for every 20% rise in the fraction of 15-44 year old women eligible for Medicaid. Thus increased health insurance eligibility did improve health outcomes and was cost-effective compared to the relative value of life and the cost of other government policies for saving lives. Medicaid expenditures increased to $1.7 million per infant life saved. The expansion of coverage also reduced low birth weight outcomes but to a lesser extent. A 2% reduction in low birth weight would result from an increase in eligibility of 20%. The broad expansions of coverage to all low income women had limited effect perhaps because of the failure of women to obtain care or the high cost of prenatal care. The coverage expansion included two quite different populations: a narrowly targeted population and a broad expansion to all women with incomes less than specified levels (e.g. 185% of the poverty level). Research is still needed on whether expansion of health insurance coverage to all uninsured would be effective in improving outcomes other than pregnancy outcomes among AFDC (Aid for Families with Dependent Children) eligible women. The Medicaid expansion of benefits expanded the fraction of women eligible for public insurance in the event of pregnancy from 14.2% in 1979 to 34% in 1990. The rate of increase across different US states varied over time and place. Analysis of data was based on a logistic simulation model for the 12 years of Current Population Survey and Vital Statistics data between 1979-90 for 49 states and the District of Columbia. Variations in the trends in eligibility showed that under the strict Medicaid criteria of the Reagan administration the number of eligible women increased in part due to the recession and the increased number of women slipping into poverty. The sample was restricted to women with incomes twice the poverty line.