It was one of the backbones of the Obama administration's push to expand Medicaid coverage under the Affordable Care Act: insuring the poor under Medicaid would reduce the reliance on emergency rooms for primary care, in turn saving significant healthcare dollars.
But a new study in the journal Science shows this is not the case. In fact, in states where there has been a Medicaid expansion, there has also been an increase in emergency room visits — both for conditions that could be treated elsewhere, and those that belong in the ER.
"Expanding health insurance coverage does make people better off. It improves their mental well-being, it improves their financial security."
The data comes from five years of research in Oregon, where 10,000 residents were chosen randomly, by lottery, to receive Medicaid, out of an eligible pool of 90,000 people. The research also shows that those enrolled in Medicaid also took advantage of more primary care and more prescription coverage.
"You have individuals who are used to using the emergency room for primary care," MIT healthcare economist Jonathan Gruber told Here & Now's Meghna Chakrabarti. "You cover them with insurance, it takes them awhile to adjust their behavior. And I think this partly speaks to the fact that this study didn't speak to the long run effects."
Gruber says the "striking" finding of this study is that having health insurance contributes to financial security and improved mental health.
"I think that goes well beyond the effects of medical care, but really speaks to the stress people live under everyday when they are uninsured and are worried about going bankrupt," Gruber said. "I think the big lesson of the Oregon experience is A, expanding health insurance coverage does make people better off. It improves their mental well-being, it improves their financial security. B, expanding health insurance by itself doesn't save money. Expanding health insurance costs money. C, what it says is if we want to look to saving money, we have to look to other aspects of the Affordable Care Act. This is the first time in about 20 years we've seen healthcare actually shrink as a share of our economy."
- Jonathan Gruber, economics professor at the Massachusetts Institute of Technology. He is director of the Health Care Program at the National Bureau of Economic Research and an associate editor of the Journal of Public Economics and the Journal of Health Economics. He was an adviser to the Obama Administration from 2008 to 2010.
This segment aired on January 7, 2014.