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What's so Bad About Crowd-Out? Rethinking the Consequences of SCHIP Expansion

a PSC Research Project [ARCHIVE DISPLAY]

Investigator:   Helen Levy

On December 13, 2007, President Bush vetoed for the second time the reauthorization of the State Children's Health Insurance Program. One of his objections to the program is that some children may substitute SCHIP for private coverage - the phenomenon known as "crowd out". We believe that crowd-out has been unfairly maligned. Low-income families that drop private coverage in order to enroll their children in SCHIP can take whatever they had been spending on health insurance and spend it on something else. From the perspective of a low-income family, crowd-out is a windfall, not a problem. We will use data from the Consumer Expenditure Study to analyze how the SCHIP expansions affected total household consumption and also detailed categories of household spending (e.g. food, housing, education). The proposed project will provide solid data on how SCHIP expansions had improved the material well-being of the low-income families it is intended to assist - including those who have previously been paying for their own coverage. This evidence will, we hope, return crowd-out to its proper context and reframe the debate over SCHIP expansion with a renewed emphasis on the benefits rather than the costs of coverage expansions.

Funding Period: 10/01/2008 to 03/31/2010

Country of Focus: USA

This PSC Archive record is displayed for historical reference.

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