When Obamacare’s Medicaid expansion was being pushed, proponents argued that the increased insurance coverage would do wonderful things for pre-natal and newborn health.
But, a new working paper is questioning that promise.
The paper is called, “Does Medicaid Coverage for Pregnant Women Affect Prenatal Health Behaviors?” and is published by the National Bureau of Economic Research.
The researchers found that increased Medicaid eligibility is associated with a significant increase in prenatal smoking.
And, it’s worse than you think.
Not only is increased Medicaid eligibility associated with an increased probability of smoking while pregnant increased Medicaid eligibility is associated with an increased probability of smoking more than 5 cigarettes a day while pregnant.
What the heck is going on?
The researchers argue that two factors are at work.
First with Medicaid those covered pay little or nothing for the insurance, doctors visits, and many types of treatment. This frees up money to buy other things. The researchers estimated that the Medicaid expansion in their study amounted to an average of $700 a year in increased disposable income.
It’s well know that cigarettes are what economists call a normal good, meaning that, all other things equal, an increase in income would be associated with increased cigarette smoking.
So, some of the additional disposable income from Medicaid cover is spent on additional purchases of smokes.
The second factor is what economists call moral hazard. With Medicaid insurance coverage, treating any illness or pregnancy complication is virtually free. Because treatment is free, there is a reduced incentive to engage in healthier—but less enjoyable—activities. Why quit smoking, if the doctor can fix you for free?
It’s important to note that this study focuses on a very narrow issue, so we shouldn’t be too quick to draw broad conclusions.
Nevertheless, the researchers themselves suggest that their findings help explain the observation that increased Medicaid expansion seems to have no significant effect on newborns’ health.