In 2007 the Uruguayan government launched a reform aimed at expanding social healthinsurance to family-members of formal workers and to retirees. The policy increased insurance generosity -relative to the safety net alternative- and increased competition by allowing new beneficiaries to choose care from a set of private providers. Exploiting the phased-in implementation and the geographic variation in the intensity of the reform, we find that the expansion of social health insurance had a negligible effect on perinatal health and health care among adolescent mothers and their newborns. Our results do not support prior research showing health care quality improvements in settings with increased choice. We hypothesize that health care rationing by private providers due to rising wages, a smaller primary care infrastructure of private providers in low-income neighborhoods, and cultural and financial barriers may have accounted for the lack of positive effects.