Public Program Crowd-Out of Private Coverage

Coverage expansions by Medicaid, SCHIP and other state programs significantly increased the number of people covered by public insurance. Crowd-out occurs when people drop private coverage for public coverage, when those enrolled in public insurance turn down private coverage when eligible, or when employers opt not to offer private insurance because of the existence of a public program. This synthesis examines the extent of crowd-out and whether it can be reduced. Key findings include: Estimates of crowd-out are imprecise and vary depending on the type of coverage expansion; the assumptions, methods and data used; and the time period covered. Crowd-out is more likely to occur in programs that enroll families, and among families with incomes greater than 200 percent FPL. Programs have used waiting periods and cost-sharing to limit crowd-out, but these techniques can be difficult and costly to implement, and may reduce program participation by the uninsured.