Does public insurance coverage for pregnant women affect prenatal health behaviors?

Despite plausible mechanisms, little research has evaluated potential changes in health behaviors in response to expansions in public insurance coverage of the 1980s and 1990s targeted at low-income families. In this paper, we provide the first national study of the effects of Medicaid expansions on health behaviors for pregnant women, which is a group of particular interest given evidence of the importance of prenatal health to later life outcomes. In doing so, we also add to the sparse literature on ex ante moral hazard, which is nearly always mentioned as a theoretical consequence of health insurance, though relatively few empirical studies have assessed its importance. We exploit exogenous variation from the Medicaid income eligibility expansions for pregnant women during late-1980s through mid-1990s to examine the effects of these policy changes on smoking, weight gain, and other maternal health indicators. We find that the 13 percentage point increase in Medicaid eligibility during the study period was associated with approximately a 3% increase in smoking and a small increase in pregnancy weight gain for most of the sample. The increase in smoking, which is a significant cause of poor infant health, may partly explain why Medicaid expansions have not been associated with substantial improvement in infant health.