Due to the low risk associated with not insuring the average healthy child for a finite period of time, it seems plausible that mandatory wait periods of no insurance (particularly shorter periods) do not provide enough incentive for capable, eligible parents to keep their children enrolled in private insurance plans. Therefore, we hypothesize that it is likely that the most popular form of preventative crowd-out measures (except perhaps in its most extreme form) may interfere with the success

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... f SCHIP by generating new uninsured children. Using data from the 1996 wave of the Survey of Income and Program Participation (SIPP), this research seeks to determine the impact of mandatory wait periods on SCHIP's goal of decreasing the uninsured rates of children. Specifically, we seek to determine 1) the relationship between mandatory wait periods and crowd-out behavior; and 2) the impact of various lengths of no coverage periods on crowd-out behavior. Using the variation in mandatory wait periods (from 0 to 12 months) across states, we observe the post-SCHIP insurance behavior of individuals who had private health insurance 6 months prior to the implementation of SCHIP in their state of residence. We find evidence that SCHIP eligible residents of states in which there are mandatory wait periods are more likely to be uninsured for one or more months during the six months following the initiation of SCHIP in their state. The positive relationship between uninsured status and mandatory wait period is decreasing and is negative when the mandatory wait period is twelve months. Twelve months seems to create enough risk to discourage eligibles from crowding out.