NPR

Medicaid Makes 'Big Difference' In Lives, Study Finds

As high-level budget talks drag on in Washington, the Medicaid program for the poor remains a prime candidate for cuts. In recent months, Republicans have criticized Medicaid for badly serving its target population. But a new study — the first of its kind in nearly four decades — finds that Medicaid is making a bigger impact than even some of its supporters may have realized.

The study, being published as a working paper by the National Bureau of Economic Research, has a distinctly bipartisan flavor. Among its authors are Katherine Baicker of Harvard, who was an economic adviser to President George W. Bush, and MIT economist Jonathan Gruber, who has advised the Obama administration.

"What we found in a nutshell is that having Medicaid makes a big difference in people's lives," said Amy Finkelstein, another MIT economist and one of the study's principal investigators.

Overall, researchers found that compared to people without insurance, those with Medicaid had better access to and used more health care; they were less likely to experience unpaid medical bills; they were more likely to report being in good health; and they were less likely to report feeling depressed.

In fact, says Finkelstein, among those with Medicaid, "We report almost a one-third increase in the probability that you report yourself as being happy."

We report almost a one-third increase in the probability that you report yourself as being happy.
Amy Finkelstein, one of the study's principal investigators

Participating Doctors

The findings are dramatically at odds with the storyline coming from critics of the program.

"Medicaid Is Worse Than No Coverage At All," blared a headline on the opinion page of the Wall Street Journal back in March.

Scott Gottlieb, a physician and resident fellow at the conservative American Enterprise Institute and author of that column, says now that it overstates his opinion. But he does say there's a substantial body of academic work that shows people on Medicaid fare worse than those with private insurance.

"There's a large number of studies now that show poorer outcomes with Medicaid recipients," Gottlieb said in an interview. "What's happening, I think, is [the health of Medicaid patients] is suffering because the quality of the insurance is being driven down over time."

Both Gottlieb and John Goodman, president of the conservative National Center for Policy Analysis, say a big problem is that states pay doctors and other health care providers so little that patients have trouble finding someone to treat them.

"A Boston cabdriver told me the other day that she had to go through 20 doctors before she could find one who would see her," said Goodman. "I said, 'Are you going down the Yellow Pages?' And she said, 'No, I was going down the list that Medicaid gave me.'"

A Unique Opportunity

Yet Finkelstein and her colleagues failed to find evidence to back up some conservative claims that doctors were more likely to accept patients who were uninsured and willing to pay cash than those with Medicaid.

"We see that the chance that you've gotten any outpatient care increases by 35 percent if you have Medicaid, relative to if you have none," she said. "The chances that they report having a regular office or clinic for their primary care increases by 70 percent. And the likelihood that they report having a particular doctor that they usually see increases by 55 percent."

And this is more than just dueling studies. The study by Finkelstein and colleagues from Harvard, the National Bureau of Economic Research and the state of Oregon is the first one of its type since the 1970s.

It came about because Oregon in 2008 decided it could expand its Medicaid program for nondisabled adults with incomes below the federal poverty line. But it could afford to add only 10,000 more people.

Knowing that far more people than that were eligible and likely to apply, officials decided to hold a lottery. Those who won got to apply for coverage; those who lost did not.

But the lottery also provided researchers a unique opportunity to compare a population that was nearly identical in every way except for health insurance status. Such a "randomized controlled trial" is considered the gold standard in medical and scientific research. It would have been unethical to design had Oregon not been doing it anyway, because researchers can't give some people insurance and withhold it from others.

"It was literally a once-in-a-lifetime opportunity," Finkelstein said.

Once the randomly selected people got Medicaid, the researchers entered them into the study, along with thousands of adults who lost the lottery and remained uninsured.

A Snapshot And A Springboard

The importance of a study like this one, Finkelstein says, is that it can correct for things other studies can't. Studies that are less rigorous, she says, can produce odd results, leading to claims like those being made by Republicans that having Medicaid can make you sicker.

"But that's not because health insurance can make you sicker — it's because if you're sick, you're much more likely to go the extra mile or incur the additional expense to try to get health insurance," Finkelstein said.

The study out Thursday is only the first snapshot of the massive Oregon database. The researchers are calling it "The Oregon Health Insurance Experiment," echoing the famous "RAND Health Insurance Experiment" of the 1970s.

Finkelstein says researchers now plan to do personal interviews with 12,000 of the people included in the study, including performing medical tests such as measuring blood pressure and cholesterol, to get an even more definitive picture of how having Medicaid compares with being uninsured.

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Transcript

RENEE MONTAGNE, host:

And in the budget talks that we've just been discussing, one of the big programs that comes up often is Medicaid. That's the government's medical insurance program for the poor. In recent months, Republicans have often criticized Medicaid for badly serving its target population.

But as NPR's Julie Rovner reports, a new study finds that Medicaid is making a bigger impact than even some of its supporters claimed.

JULIE ROVNER: Anyone who thinks Medicaid provides good insurance just needs to talk to people who have it, says program critic John Goodman. He's president of the conservative National Center for Policy Analysis.

Mr. JOHN GOODMAN (National Center for Policy Analysis): A Boston cabdriver told me the other day that she had to go through 20 doctors before she could find one who would see her. I said, are you going down the Yellow Pages? She said no, I was going down the list that Medicaid gave me.

ROVNER: Scott Gottleib is a physician who treats Medicaid patients at New York University Hospital. He's also a senior fellow at the conservative American Enterprise Institute.

Dr. SCOTT GOTTLEIB (New York University Hospital): What's happening is, I think, Medicaid patients, their health is suffering because the quality of the insurance is being driven down over time.

ROVNER: In a widely quoted column he wrote for the Wall Street Journal this spring, Gottleib cited a large body of academic work showing Medicaid coverage was lacking.

Dr. GOTTLEIB: These studies show, there's, you know, a large number of studies now that show poorer outcomes for the Medicaid recipients.

ROVNER: Meaning they're sicker than those with other kinds of insurance. Some critics even say having Medicaid is worse than having no insurance at all. But a new study suggests that Medicaid actually has a dramatic and positive effect on the lives of the people it serves. Amy Finkelstein is an economics professor at MIT in Boston and one of the study's lead investigators.

Professor AMY FINKELSTEIN (MIT): We found that people who have Medicaid use more healthcare, have less out of pocket medical expenses and medical debt, and report that they are in better health and overall well-being than similar individuals without insurance.

ROVNER: And despite claims that doctors are more likely to accept patients with no insurance than people with Medicaid, that's not what Finkelstein and her colleagues found.

FINKELSTEIN: We see the chance that you've gotten any outpatient care increases by 35 percent if you have Medicaid, relative to if you have none. The chances that they report having a regular office or clinic for their primary care increases by 70 percent. And the likelihood they report having a particular doctor, you know, a usual doctor that they see increases by 55 percent.

ROVNER: Now, before you chalk this up to just another case of dueling studies, consider this. The study by Finkelstein and colleagues from Harvard, the National Bureau of Economic Research, and the State of Oregon, is the first one of its type in nearly 40 years.

FINKELSTEIN: I think it's literally a once-in-a-lifetime opportunity.

ROVNER: She's excited because until now researchers couldn't ethically design a study that denies health insurance to people. But circumstances in Oregon a couple of years ago provided an ethical way to easily compare the health of people who got Medicaid with those who had no insurance. You see, Oregon decided in 2008 that it only had enough money in its budget to allow 10,000 more adults into Medicaid. But tens of thousands more Oregonians were poor and eligible.

So the state held a Medicaid lottery. Those who won got to apply. Once they got Medicaid, researchers entered these randomly selected people into their study, along with thousands of adults who lost the lottery and remained uninsured. This kind of randomized, controlled study is the gold standard for research. So it would now be possible to answer a question that's been hanging over Medicaid for 40 years: Are people better off on Medicaid or are they sicker because they have Medicaid?

FINKELSTEIN: And certainly in this setting, in Oregon, in our population, there's no evidence that having Medicaid is worse than no insurance. In fact, quite the opposite. It's much better.

ROVNER: Studies that are less rigorous, she says, can produce odd results, leading to claims like those being made by Gottlieb and other Republicans, that having insurance or Medicaid makes you sicker something Finkelstein's study clearly did not find. The study out today is only the first snapshot of the massive Oregon database. Finkelstein says researchers now plan to do personal interviews with 12,000 of these people and perform medical tests to get an even more definitive picture of how having Medicaid compares with being uninsured.

Julie Rovner, NPR News. Transcript provided by NPR, Copyright NPR.

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