Does Medicaid Matter? New Study Shows How Much

As we noted recently, one of the charges that policymakers seeking radical changes in Medicaid have leveled against the program is that Medicaid coverage is worse than no coverage. A path-breaking study released today should put that bizarre claim to rest once and for all.

Conducted by an all-star group of health economists — including a member of President George W. Bush's economic team — the study found that “enrollment in Medicaid substantially increases health care use, reduces financial strain, and improves self-reported health and well-being.”

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The study compared people with Medicaid coverage to uninsured low-income people and found that the people with Medicaid were, among other things:

• More likely to receive doctor-recommended preventive care (for example, women were 60 percent more likely to have a mammogram);
• 70 percent more likely to have a regular office or clinic where they could receive primary care;
• 40 percent less likely to have to borrow money or leave other bills unpaid in order to cover medical expenses; and
• 40 percent less likely to experience a decline in their health over the last six months.

What makes the study so important is its design. Researchers looked at what happened when Oregon used a lottery to decide which low-income uninsured adults on a waiting list for Medicaid could apply for coverage. The lottery allowed the researchers to compare two groups of people who differed in only one major way: one group got Medicaid coverage and the other did not. While this sort of random assignment is the gold standard for scientific research, it is extremely unusual in social policy research, since it is unethical to deny people something like health care just for the sake of an experiment.

“What we found in a nutshell is that having Medicaid makes a big difference in people's lives,” said one of the researchers. Policymakers should keep that in mind as they consider changes to the program.