Treatment or Placebo: Are State Programs Decreasing the Proportion of Uninsured?

Currently there are over 45 million Americans without health insurance. Recent growth in Medicaid and State Children's Health Insurance Program (SCHIP) enrollment of children has filled in the sizable gap created by decreased employer‐sponsored insurance since 2000. While the share of children who are uninsured actually decreased between 2000 and 2003, little progress was made in expanding public insurance to adults. As a result, advocates and policymakers at the federal and state level are searching for approaches to deal with the growing number of the uninsured. Conservatives advocate encouraging individuals to buy private insurance while liberals advocate the provision of health coverage through publicly financed health care. Using a 50‐state multilevel individual growth model, this study estimates the net effect of two state approaches in terms of reducing the uninsured: tax incentives (the conservative approach) and direct‐coverage programs (the liberal approach). The results suggest that these approaches have not achieved the results that many advocates had suggested. In the case of tax incentives, the results suggest that states with tax incentives experience increases in the rate of the uninsured. In the case of direct‐coverage programs, results suggest that states receive no relief in the number of uninsured individuals. Finally, the analysis suggests that the efforts originating at the federal level are most successful. These programs are a continuation of the incremental approach policymakers in America have taken to address the problem of the uninsured, rather than taking steps toward a truly comprehensive solution.