Study: Medicaid Coverage Makes a ‘Big Difference’

• JULY 7, 2011, 8:59 AM ET

 

By Anna Wilde Mathews

A new research paper gives the clearest answer yet to a key question: how are people affected by gaining health insurance?

A study of people who got new Medicaid coverage shows that they received significantly more care, including preventive checks and hospital admissions, improved their financial situation, and felt better. “Having Medicaid made a big difference in many dimensions,” Amy Finkelstein, an MIT economics professor and lead author of the paper, tells the Health Blog.

The issue is more important than ever, with a huge new influx of Medicaid beneficiaries and other newly-covered people expected in 2014 due to the health-overhaul law. But it’s always been tough for researchers to get a good picture of the effects of new health coverage. In the real world, there are likely inherent differences between people with and without insurance, making it hard to get an answer by simply studying those groups.

The new paper, published by the National Bureau of Economic Research, focuses on an Oregon program that let certain low-income adults qualify for Medicaid through a random lottery process. That conveniently established the conditions for the gold standard of scientific research, a randomized controlled trial. The only similar study to take place in the U.S., Rand’s Health Insurance Experiment, which began in 1971, looked just at the effects of different levels of out-of-pocket charges on insurance enrollees.

The new study used surveys, hospital discharge data and other sources to compare the roughly 30,000 people who were selected in the lottery to 45,000 people who signed up and didn’t get chosen. It examined approximately the first year of coverage.

Overall, health-care expenditures for those who got coverage went up by roughly a quarter, which translated into about $778 a year. Those who received Medicaid were around 60% more likely to get mammograms — the proportion receiving the screening test rose to nearly 50% from 30%. Medicaid recipients were 55% more likely to have a regular primary-care doctor. They were also in better shape financially, roughly 25% less likely to have an unpaid medical bill sent to collections.

Those who got Medicaid were also far more likely to report themselves in good or excellent health. That may set up a contrast with the Rand research, which generally showed little difference in health outcomes for those with more generous insurance, even though they used more health services.

“If it holds up, it would be a very important difference,” said Joseph Newhouse, a Harvard professor who was also an author of the new study. He said the researchers plan to look at actual health outcomes for the Oregon population, as opposed to self-reported status, in a future paper.

But emergency-room admissions didn’t decline –  and actually rose slightly, though not significantly — for those who got Medicaid.

Also, the researchers are cautious about whether their results can be extrapolated to the huge new population of Medicaid beneficiaries that will be created by the health-overhaul law; the folks in Oregon may not be nationally representative.