• By Dennis Thompson HealthDay Reporter
• Posted August 12, 2022

When Adults Sign Up for Medicaid, Kids Can Benefit

Some adults who sign up for Medicaid also bring their unenrolled but eligible kids into the system, a new study reports.

For every nine adults who gained access to Medicaid in Oregon due to a special enrollment lottery, one previously eligible child was added to the rolls as well, according to researchers at the Massachusetts Institute of Technology.

Their study called this an example of the "woodwork effect," where people eligible for social programs come out of the woodwork to claim benefits that have been on the table for months or years.

Across the United States, about 14% of eligible adults and 7% of eligible children have not enrolled in Medicaid, the national health insurance plan for low-income people.

In 2008, Oregon obtained funding to expand Medicaid to more low-income uninsured adults. The state ran a lottery for new Medicaid entry, receiving about 90,000 applications for 10,000 new slots.

Researchers used that lottery as a basis to examine whether there would be a woodwork effect among children of parents chosen in the lottery for Medicaid slots.

"This enabled us to look at the question of what happens to children of adults who win the lottery, compared to children of adults who don't win the lottery," said study co-author Amy Finkelstein, a professor of economics at MIT. "We were just trying to get a sense of whether there were impacts on the children, and how large these effects were."

They found a real but modest woodwork effect that shrank over time.

A year out from the lottery, the enrollment difference between lottery-winning and lottery-losing households was about a third its initial size. Some lottery-winning adults let their children's Medicaid status lapse, while adults who lost the lottery got their kids signed up for the program.

The study shows concerns that Medicaid expansion might greatly increase taxpayer costs aren't well-founded, researchers said. Instead, the added costs might be modest.

The cost of covering children through Medicaid is roughly four times smaller than covering adults, Finkelstein noted.

"From a budget perspective, children tend to be much cheaper to cover than adults," she said in an MIT news release. "They have lower health expenditures."

The findings were recently published in the American Economic Journal: Economic Policy.

More information

The Center on Budget and Policy Priorities has more about Medicaid.

SOURCE: Massachusetts Institute of Technology, news release, Aug. 9, 2022