Targeting in Medicaid: The costs and enrollment effects of Medicaid's citizenship documentation requirement

The Deficit Reduction Act of 2005 imposed a federal requirement that all individuals provide citizenship documentation when applying for or renewing Medicaid coverage. This represented a change in policy for 46 states. Using differences-in-differences to analyze data from the Current Population Survey (2004–2008), this paper shows that the policy reduced Medicaid enrollment among non-citizens, as intended, and did not significantly affect citizens. One-in-four adult non-citizens in Medicaid (390,000 total) and one-in-eight child non-citizens (81,000) were screened out by the policy annually. Child non-citizens were more likely to become uninsured afterwards, while adult non-citizens appeared to shift from Medicaid to other coverage.Overall, the citizenship documentation requirement reduced Medicaid participation among non-citizens in an appropriately targeted way. Nonetheless, a cost-benefit analysis indicates that the policy was a net loss to society of $600 million, through increased state administrative spending and compliance costs imposed on U.S. citizens applying for Medicaid.