"What Is Crowd Out and Why Should Children's Health Advocates Care?"
Publication Date: January 1998
Publisher(s): Families USA
"Crowd out" refers to the substitution of public programs for private arrangements. It occurs to some extent in every public program. In the context of health insurance, it can occur if either employers or employees drop private insurance in favor of coverage under a public insurance program. Crowd out has become a concern in the expansion of public insurance programs to higher income families who are more likely to have access to private insurance options than do the poor. The new children's health insurance program, Title XXI of the Social Security Act, requires states to describe how new or expanded public health insurance for children will avoid substitution for private employer coverage .
This is an important issue for those who want to assure that public dollars target uninsured children. Unfortunately, some of the methods for avoiding crowd out exclude uninsured children from eligibility for health insurance under Title XXI. Advocates need to learn about this issue in order to make the case for avoiding crowd out without harming children.