By Phillip Klein
During the health care debate, liberals argued that government had to
a moral duty to enact legislation that expanded health insurance among
lower-income individuals. But a landmark study
published in the New England Journal of Medicine dramatically
undermines this assumption and shatters the rationale behind the law’s
Medicaid expansion.
In 2008, Oregon expanded its Medicaid program, but because the state
could not cover everybody, lawmakers opened up a lottery that randomly
drew 30,000 names from a waiting list of almost 90,000 and allowed them
to apply for the program. This created a unique opportunity for health
researchers, ultimately allowing them to compare the health outcomes of
6,387 low-income adults who were able to enroll in the program with
5,842 who were not selected.
Contrary to liberal assumptions, researchers found that those who
enrolled in Medicaid spent a lot more on medical care than those who
weren’t able to enroll, but didn’t significantly improve their health
outcomes.
Specifically, researchers found that those who received Medicaid
increased their annual health care spending by $1,172, or 35 percent
more than those who did not receive Medicaid. Those with Medicaid were
more likely to be screened for diabetes and use diabetes medication and
to make use of other preventive care measures. The study also examined
health metrics including blood pressure and cholesterol.
Ultimately, the authors concluded that, “This randomized, controlled
study showed that Medicaid coverage generated no significant
improvements in measured health outcomes in the first two years, but it
did increase use of health services, raise rates of diabetes detection
and management, lower rates of depression, and reduce financial strain.”
So, the study suggests that expanding Medicaid is one way of reducing
financial pressure on low-income groups, but it’s costly and does not
improve their health.
Another interesting finding was that though medical spending
increased among Medicaid enrollees due to more prescription drug usage
and doctors’ visits, the study “did not find significant changes in
visits to the emergency department or hospital admissions.” This
undercuts another favorite talking point of liberals, which is that
expanding insurance actually saves money by reducing costly emergency
room visits.
Of course, this is just one study, and the authors offer some
caveats. Among others, the study measured an average of about 17 months
of health outcomes, so longer-run results may differ. Also, the study
applied to Medicaid, rather than private insurance. But given that it
had a sample size of over 12,000 and was so well designed, its
conclusions will reverberate.
As the authors explain, “our study provides evidence of the effects
of expanding Medicaid to low-income adults on the basis of a randomized
design, which is rarely available in the evaluation of social insurance
programs.”
Starting next year, millions more Americans will become eligible for
Medicaid as a result of President Obama’s health care law. As Cato’s Michael Cannon
put it, “There is no way to spin these results as anything but a rebuke
to those who are pushing states to expand Medicaid. The Obama
administration has been trying to convince states to throw more than a
trillion additional taxpayer dollars at Medicaid by
participating in the expansion, when the best-designed research
available cannot find any evidence that it improves the physical health
of enrollees. The OHIE even studied the most vulnerable part of the
Medicaid-expansion population – those below 100 percent of the federal
poverty level – yet still found no improvements in physical health.”
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