Public Health Insurance and Infant Health: Evidence from Medicaid Funding Cuts in Texas

This paper examines the effects of the 2005 Texas Medicaid funding cutbacks on prenatal care utilization, birth outcomes, and infant mortality. Using the universe of U.S. natality and mortality records from 2000 to 2010, we implement event study and difference in differences designs comparing Texas to other states. The cutbacks led to a sizable reduction in Medicaid receipt, modest reductions in general healthcare utilization, and substantial reductions in prenatal care, including fewer visits and delayed initiation of care. These disruptions were accompanied by declines in birth weight and increases in adverse measures of health at birth, including low birth weight, very low birth weight, extreme low birth weight, and very preterm birth. Infant mortality rose by roughly 7 percent. Heterogeneity analyses show that the increases in low, very low, and extremely low birth weight and in very preterm birth appeared in every racial, ethnic, and educational group, with the largest percentage-point increases in the most severe outcomes (very preterm birth and extremely low birth weight) among Black mothers, reflecting in part their higher baseline risk. Overall, the results demonstrate that Medicaid retrenchment meaningfully undermined early life health and underscore the importance of stable public insurance coverage during pregnancy.