The long term relationship between childhood Medicaid expansions and severe chronic conditions in adulthood

We test whether the expansions of children's Medicaid eligibility in the 1980s–1990s resulted in long‐term health benefits in terms of severe chronic conditions. Still relatively rare in the field, we use prospective individual‐level panel data from the Panel Study of Income Dynamics (PSID) along with the higher quality income measures from the Cross‐National Equivalent File (adjusting for taxes, transfers and household size). We observe severe chronic conditions (high blood pressure/heart disease, cancer, diabetes, or lung disease) at ages 30–56 (average age 43.1) for 4670 respondents who were also prospectively observed during childhood (i.e., at ages 0–17). Our analysis exploits within‐region temporal variation in childhood Medicaid eligibility and adjusts for state‐ and individual‐level controls. We uniquely concentrate attention on adjusting for childhood income. A standard deviation greater childhood Medicaid eligibility significantly reduces the probability of severe chronic conditions in adulthood by 0.05 to 0.12 (16%–37.5% reduction from mean 0.32). Across the range of observed childhood Medicaid eligibility, the probability is approximately cut in half. Greater childhood Medicaid eligibility also substantially reduces childhood income disparities in severe chronic conditions. At higher levels of childhood Medicaid eligibility, we find no significant childhood income disparities in adult severe chronic conditions.