The Impact of the Massachusetts Health Care Reform on Health Care Use Among Children.

In 2006 Massachusetts enacted a major health care reform aimed at achieving near-universal coverage in the state. While other studies have found that this reform substantially affected the use of health services in general, the impact of the reform on children is largely unexplored.1 Children are of special interest to policymakers because it is widely believed that better health in early childhood results in large payoffs to adult health and achievement (e.g., Heckman (2006), Case, Fertig and Paxson (2005)). I analyze how the reform affected the insurance coverage, health care utilization patterns, and health outcomes of children under 18 years old. Ample evidence suggests that health insurance coverage induces consumers to use more medical services because it lowers out-of-pocket costs (Newhouse (1993), Card, Dobkin and Maestas (2007), Finkelstein et al. (2011)). Public efforts to expand insurance coverage to the uninsured may therefore damage cost-control efforts by increasing total medical expenditures. However, insurance coverage may also improve the composition of health care. For example, insurance may induce substitution away from relatively expensive hospital emergency room care and towards physician’s offices. Insurance may also encourage timely preventive care that reduces future medical costs. These offsetting changes in behavior may reduce the “per dollar” cost of health even if the total amount spent on health services increases. Using data from a large survey, I find evidence