Of the ten million uninsured children in 1996, nearly half were eligible for public health insurance (Medicaid) but not enrolled. In response, policy efforts to reduce the uninsured have shifted from expanding Medicaid eligibility to increasing take-up among those eligible. However, little is known about the reasons poor families fail to enroll or the consequences. Using a unique data set I find that information and administrative costs are important barriers to enrollment, especially for Hispanics and Asians. In addition, enrolling children in Medicaid before they get sick promotes the use of preventative care, reduces the need for hospitalization, and improves health.

Most Americans are now in some form of managed care plan that restricts access to services in order to reduce costs. It is difficult to determine whether these restrictions affect health because individuals and firms self-select into managed care. We investigate the effect of managed care using a California law that required some pregnant women on Medicaid to enter managed care. We use a unique longitudinal database of California births in which we observe changes in the regime faced by individual mothers between births. We find that Medicaid managed care reduced the quality of prenatal care and increased low birth weight, prematurity, and neonatal death.