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Keywords:

  • Small businesses;
  • SCHIP;
  • crowd-out;
  • small-group market

Objective. To estimate the impact of State Children's Health Insurance Program (SCHIP) expansions on public and private coverage of dependents at small firms compared with large firms.

Data Sources. 1996–2007 Annual Demographic Survey of the Current Population Survey (CPS).

Study Design. This study estimates a two-stage least squares (2SLS) model for four insurance outcomes that instruments for SCHIP and Medicaid eligibility. Separate models are estimated for small group markets (firms with fewer than 25 employees), small businesses (firms under 500 employees), and large firms (firms 500 employees and above).

Data Collection/Extraction Methods. We extracted data from the 1996–2007 CPS for children in households with at least one worker.

Principal Findings. The SCHIP expansions decreased the percentage of uninsured dependents in the small group market by 7.6 percentage points with negligible crowd-out in the small group and no significant effect on private coverage across the 11-year-period.

Conclusions. The SCHIP expansions have increased coverage for households in the small group market with no significant crowd-out of private coverage. In contrast, the estimates for large firms are consistent with the substantial crowd-out observed in the literature.