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How Will the Proposed Expansion of Healthy Families Change Work and Marriage Incentives?

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Abstract:

Government assistance programs involve the provision of benefits to families at some income levels but not at others. A family's earnings determine whether they are eligible for benefits and what, if anything, they must pay to receive them. Program eligibility rules can have important implications for the net value of additional household earnings. At some income levels, additional earnings or marriage result in the loss of valuable services or benefits, so that earning more or marrying can actually have a negative impact on family finances. Such disincentives contradict widely held values regarding the importance of work and marriage. California received approval for a waiver that would allow the state to expand its version of the federally funded State Children's Health Insurance Program (SCHIP), called Healthy Families, to include low-income parents as well as children. In the context of the proposed expansion of the Healthy Families program to parents, this analysis addresses the following questions:

*How would the proposed design affect the work and marriage incentives of eligible families? *What alternative design options have the potential to mitigate work and marriage disincentives?

At the time of this report, California had plans to expand this Healthy Families program to enroll the parents of covered children. This change in the program has the potential to expand coverage to almost 300,000 uninsured low-income parents. How Will the Proposed Expansion of Healthy Families Change Work and Marriage Incentives for California Parents? is a brief document based on the full report, Expansion of Healthy Families: Design Issues and Marginal Tax Rates.