Expanding Medicaid doesn't improve physical health, Oregon study finds

Published: Friday, May 3 2013 2:58 p.m. MDT

In this July 12, 2012 photo, two women wait in an exam room at Nuestra Clinica Del Valle, in San Juan, Texas. Health care policy wonks were sent into a bit of a dither this week when the New England Journal of Medicine published a study finding that Medicaid does not improve physical health outcomes.

Eric Gay, Associated Press

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Health care policy wonks were sent into a bit of a dither this week when the New England Journal of Medicine published a study finding that Medicaid does not improve physical health outcomes.

Oregon began tracking 6,000 newly enrolled low-income Medicaid participants a few years back, comparing them to 6,000 in a control group that was not covered by Medicaid.

“Two years after getting randomly assigned to Medicaid coverage,” reported Ray Fisman at Slate, “recipients fared no better than a control group of uninsured, low-income Oregonians in tests for hypertension, cholesterol and diabetes treatment — all medical conditions that can be managed with proper care. The Medicaid recipients did report much lower rates of depression and — perhaps relatedly — were much less likely to be on shaky financial footing than those in the control group. But the Oregon study’s findings indicate that the claim that universal health care on its own will make Americans healthier, at least in these particular dimensions, may be wishful thinking."

The new results surprised virtually everyone, especially given that in 2011 the first interim results were widely interpreted as showing that Medicaid would have a strong impact.

The study found that those who have Medicaid coverage utilize the health care system more, but surprisingly both groups frequented emergency rooms at about the same level. This was disconcerting because the major rationale for expanding Medicaid coverage was to reduce the utilization of emergency services by the uninsured.

Conservative critics of the Affordable Care Act quickly jumped on the study, as a major feature of the new health care law involves expanding expenditures on Medicaid for low-income adults.

“This study is perhaps the best and most important study of Medicaid's health effects ever conducted,” wrote Peter Suderman at the libertarian Reason.com, “and it has huge implications for public policy — in particular for Obamacare's Medicaid expansion, which is supposed to account for about half of the law's increase in health coverage. Obamacare supporters had used the results from the study's first year, which showed large gains in self-reported health, to argue that the law's expansion of Medicaid was justified. The second-year results significantly complicate that argument.”

Not surprisingly, supporters of the new health care law downplayed the new study or emphasized different aspects of it. Not atypical was the response of Jonathan Cohn at the New Republic.

“The big news is that Medicaid virtually wiped out crippling medical expenses among the poor,” Cohn wrote. “The other big finding was that people on Medicaid ended up with significantly better mental health: The rate of depression among Medicaid beneficiaries was 30 percent lower than the rate of depression among people who remained uninsured. That’s not just good health policy. That’s good fiscal policy, given the enormous costs that mental health problems impose on society — by reducing productivity, increasing the incidence of violence and self-destructive behavior, and so on.”

“But,” he acknowledged, “one place improvement did not appear was physical health. And this was something of a surprise.”

Eric Schulzke writes on national politics for the Deseret News. He can be contacted at eschulzke@desnews.com.

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