Examining Substitution: State Strategies to Limit "Crowd Out" in the Era of Children's Health Insurance Expansions. C. National research informed the policy debate and raised important issues, yet it has not been focused on addressing state concerns with substitution.


Debates in the 105th Congress regarding the numerous legislative efforts to insure children were focused on extending health insurance to uninsured children without replacing existing insurance coverage. Substitution was viewed as an inherent concern in the debates, as it was an issue in prior congressional expansions of social insurance programs. Based on existing research which identified substitution effects within the Medicaid expansions of the past decade, legislators and federal officials required that states address the potential of substitution in their plans to expand children's health insurance programs under Title XXI. National research identified the existence of substitution, however it did not necessarily reflect the specific experiences of states that had expanded coverage for children. The overall lack of data and inconsistencies in existing data have contributed to this disconnect between research findings and state experiences. It is important to focus on state experiences in order to better determine the impact of substitution in state expansion efforts under Title XXI. However, it may be premature to reach any conclusions regarding crowd out given the small size of existing programs and the limited period of actual implementation. An accurate assessment of the impact of substitution is likely to require a longer-term analysis.