Medicaid Expansion: Little Bang for the Buck

Josh Elliott-Traficante

A recent study published in the New England Journal of Medicine suggests that the expansion of Medicaid, which is currently being debated in many states, including here in New Hampshire, does little to improve the health of the newly covered.

Several years ago, researchers were recently given the rare opportunity to study the effectiveness of Medicaid Expansion in Oregon. The state opted to expand its Medicaid program to include some low income, uninsured adults. However, funds were only available to enroll only a portion of those eligible, so roughly 10,000 individuals were chosen by random lottery to receive coverage. While unintended as such, these conditions laid the groundwork to conduct a scientific study of the efficacy of the program by creating a randomly selected sample (those chosen) with an established control group (those not chosen).

What makes this study so relevant in today’s discourse is that the population covered by Oregon’s expansion is the same population that will be covered under the expansion of Medicaid as part of Affordable Care Act in the other states. The study of nearly 12,000 individuals’ health outcomes grants rare insight into what the benefits and shortfalls of expanded Medicaid would be.

When comparing the newly covered and non-covered groups in Oregon two years out, the study found that there was little difference in health outcomes. The study concluded:

This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years…

The study did find that expansion increased the use of health services, diabetes detection and management as well as reducing financial strain, all of which would be expected. Surprisingly it did lower rates of depression by about 30%, which could be related to the reduced financial strain.

Some have argued that all that the study shows is that insurance is working because people are getting some chronic conditions taken care of, or that just by virtue of having insurance coverage does not make one healthier.

To some extent both are true, however, the gains seen in the Oregon study can be achieved by means other than the expansion of a very expensive program like Medicaid.