ECONOMIC REPORT OF THE PRESIDENT

Reauthorization Act of 2015, signed into law by the President in April 2015,
extends an annual $400 million in funding for the Maternal, Infant, and
Early Childhood Home Visiting programs through September 30, 2017.
Health Insurance
Research has established that access to insurance coverage during
childhood can have important benefits for educational and labor market
outcomes much later in life—benefits that appear to be mediated, at least in
part, through sustained improvements in health.
Medicaid and the Children’s Health Insurance Program (CHIP) provide
low-cost health coverage to millions of Americans, including nearly 44
million children and covering one-half of all low-income children (Centers
for Medicare and Medicaid Services). The programs are funded jointly
by States and the Federal Government and are administered by States.
All children enrolled in Medicaid are entitled to the comprehensive set of
health care services known as Early and Periodic Screening, Diagnosis, and
Treatment (EPSDT). CHIP also ensures a comprehensive set of benefits
for children. Most States have elected to provide Medicaid to children with
family incomes above the minimum of 100 percent of the Federal Poverty
Level, and all States have expanded coverage to children with higher incomes
through CHIP.
A pair of recent studies have used the fact that States expanded access
to health insurance for children through Medicaid and CHIP at different
times and to different extents in recent decades to study how access
to health insurance in childhood affects long-term educational and labor
market outcomes. Using data that connect individuals’ adult earnings and
tax information to their residence and family income in childhood (ages
0-18), Brown, Kowalski, and Lurie (2015) find that female children with
more years of Medicaid/CHIP eligibility in childhood (due to their State of
residence and year of birth) had higher educational attainment and higher
earnings in early adulthood. They also find evidence that both men and
women with greater access to childhood coverage pay more in income and
payroll taxes in their young adult years, potentially offsetting a substantial
fraction of the cost of providing Medicaid/CHIP coverage to children. The
authors estimate that a single additional year of Medicaid/CHIP eligibility
in childhood increased cumulative tax payments through age 28 by $186
(Figure 4-14; Brown, Kowalski, and Lurie 2015). The more years a child is
eligible, the larger the cumulative impact.
Related work by Cohodes et al. (2014) examines the impact of changes
in Medicaid/CHIP eligibility rules affecting children (ages 0-18) on educational
attainment. The authors also find improvements in educational
attainment at age 22 to 29, with individuals who were eligible for Medicaid/
182 | Chapter 4