In April 2006, Massachusetts passed legislation aimed at achieving near-universal health insurance coverage. The key features of this legislation were a model for national health reform, passed in March 2010. The reform gives us a novel opportunity to examine the impact of expansion to near-universal coverage state-wide. Among hospital discharges in Massachusetts, we find that the reform decreased uninsurance by 36% relative to its initial level and to other states. Reform affected utilization by decreasing length of stay, and the number of inpatient admissions originating from the emergency room. When we control for patient severity, we find evidence that preventable admissions decreased. At the same time, hospital cost growth did not increase. AbstractIn April 2006, Massachusetts passed legislation aimed at achieving nearuniversal health insurance coverage. The key features of this legislation were a model for national health reform, passed in March 2010. The reform gives us a novel opportunity to examine the impact of expansion to near-universal coverage state-wide. Among hospital discharges in Massachusetts, we find that the reform decreased uninsurance by 36% relative to its initial level and to other states. Reform affected utilization by decreasing length of stay, the number of inpatient admissions originating from the emergency room, and preventable admissions. At the same time, hospital cost growth did not increase.

We estimate marginal returns to medical care for at-risk newborns by comparing health outcomes and medical treatment provision on either side of common risk classifications, most notably the "very low birth weight" threshold at 1500 grams. First, using data on the census of US births in available years from 1983-2002, we find evidence that newborns with birth weights just below 1500 grams have lower one-year mortality rates than do newborns with birth weights just above this cutoff, even though mortality risk tends to decrease with birth weight. One-year mortality falls by approximately one percentage point as birth weight crosses 1500 grams from above, which is large relative to mean one-year mortality of 5.5% just above 1500 grams. Second, using hospital discharge records for births in five states in available years from 1991-2006, we find evidence that newborns with birth weights just below 1500 grams have discontinuously higher costs and frequencies of specific medical inputs. We estimate a $4,000 increase in hospital costs as birth weight approaches 1500 grams from above, relative to mean hospital costs of $40,000 just above 1500 grams. Taken together, these estimates suggest that the cost of saving a statistical life of a newborn with birth weight near 1500 grams is on the order of $550,000 in 2006 dollars.

In April 2006, Massachusetts passed legislation aimed at achieving near-universal health insurance coverage. The key features of this legislation were a model for national health reform, passed in March 2010. The reform gives us a novel opportunity to examine the impact of expansion to near-universal coverage state-wide. Among hospital discharges in Massachusetts, we find that the reform decreased uninsurance by 36% relative to its initial level and to other states. Reform affected utilization by decreasing length of stay, the number of inpatient admissions originating from the emergency room, and preventable admissions. At the same time, hospital cost growth did not increase.

We thank Denis Chetverikov and Sukjin Han for excellent comments and capable research assistance. We are grateful to Richard Blundell for providing us the data for the empirical application. Stata software to implement the methods developed in the paper is available in Amanda Kowalski's web site at http://www.econ.yale.edu/ak669/research.html. We gratefully acknowledge research support from the NSF. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.

and the WEAI provided helpful comments. NSF CAREER Award 1350132 and the Stanford Institute for Economic Policy Research (SIEPR) provided support. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.