Medicaid, Welfare Dependency, and Work: Is There a Causal Link?

Medicaid exerts a strong “pull” on potential welfare recipients, increasing the probability that a number of single mothers will apply for and stay on welfare in order to be covered by Medicaid. However, the availability of private health insurance coverage exerts a strong positive influence on women's decisions to work and a strong negative effect on welfare participation rates. If private insurance coverage were as comprehensive as Medicaid and readily available at all jobs, its impact on promoting work would be substantially greater than is the impact of Medicaid in promoting the use of welfare.