The Impact of State Children’s Health Insurance Program (SCHIP) Expansion on Health Insurance Coverage in Hawaii

This study investigates the impact of the State Children’s Health Insurance Program (SCHIP) expansion in Hawaii on health insurance coverage among low-income children ages 0 to 18 using the Current Population Survey. We employ a difference-in-differences approach by construction of a control group for which SCHIP eligibility remained constant, and a treatment group for which SCHIP eligibility changed over the observation period. We find that the initial SCHIP implementation of July 1, 2000 resulted in a 20 percent increase in SCHIP beneficiaries, with 87 percent of these children drawn from the ranks of the privately insured. The presence of substantial crowd-out is likely the result of important factors unique to Hawaii’s health insurance environment and implies that the cost to state and federal taxpayers per newly insured child is much higher than the usual per-capita expense. Subsequent expansions to higher federal poverty line that occurred since initial SCHIP implementation also likely generated substantial crowd-out.