First, the results themselves may be underestimates of the true
Medicaid take-up rate as researchers may have only noisy proxies
of Medicaid eligibility. As Remler and Glied (2003) note, programs
with asset tests often appear to have low take-up rates in part
because individuals who appear eligible to the researcher—who
often only has data on individuals’ pre-tax income levels—are not
in fact eligible.7 Moreover, state-level rules on Medicaid eligibility
vary tremendously—including the deductions allowed in calculating
assets and income and how long one must be uninsured
before gaining eligibility—further complicating researchers’ efforts
to identify who is eligible for the program. In a similar setting,
Daponte et al. (1999) find that proxying eligibility with whether
an individual meets the income test creates substantial downward
bias in estimated take-up rates in the food stamp program: only
about half of a sample of households that met the income test met
the other requirements in the state of Pennsylvania.