The Medicaid Experiment We Really Need  

A blog about business and economics.
May 2 2013 8:29 AM

The Oregon Medicaid Experiment Changes Nothing. Here's The Experiment We Really Need.

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Sen. Sheldon Whitehouse (D-RI) speaks during a news conference about preserving Medicaid funding on December 11, 2012 in Washington, DC.

Photo by Chip Somodevilla/Getty Images

If you follow wonky political punditry, you've probably read some coverage already of the latest Medicaid expansion study out of Oregon, and that coverage has been a bit silly.

Here's what happened: Oregon had enough money to expand Medicaid coverage to more people, and they chose to do that via a lottery. Since the expansion was done via lottery, we have a nice randomized control trial. What the RCT study showed is that when a low-income family gets Medicaid, this improves their financial condition a lot. But does it make them healthier? That's a lot less clear. In order to construct a feasible study, the researchers had to limit their inquiry to just a few indicators. Those indicators did not improve by a statistically significant amount. In addition to being more financially secure, Medicaid recipients seem to have improved mental health outcomes (less depression) and are receiving more preventive care, which may improve their health farther down the road than this two-year study takes into account.

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For comparison, my health insurance is covered by Kaiser Permanente. Over the past two years, I've gone to the doctor once. The visit did not improve my health outcomes. She confirmed that I have a chronic injury in my right heel that there's no useful medical intervention for, and that otherwise I'm basically healthy. More recently, I got my eyes checked by an ophthamologist who wrote me a new prescription and also checked my blood pressure. My out-of-pocket costs for all this were low (yay health insurance!) and I felt better about myself and the world after speaking to the doctor about my heel even though she didn't actually fix anything. So having health insurance over the past two years has done nothing to improve my health, but it has improved my financial state by reducing out-of-pocket spending on a useless heel exam and a moderately useful eye exam.

The Medicaid study hasn't changed the political views of anyone I know, and it shouldn't change yours either. The political debate in America is about whether we should tax the rich to expand Medicaid or whether we should cancel Medicaid expansion in order to cut taxes for the rich. If you like the idea of taxing the rich to help the poor (I sure do), the study shows that Medicaid helps. If you don't like the idea of taxing the rich to help the poor, the study gives you a talking point.

Here's the study I want to see: A state considering expanding Medicaid to cover X people at $Y cost, should instead spend half that money on giving Medicaid to half the people and give out the rest of the money via cash grants. That way, instead of studying, "does getting Medicaid help low-income families" (of course it does) we could study, "does $2,000 of Medicaid benefits help low-income families more than $2,000 in cash," which I think is an interesting question. For one thing, while the provision of health care can (and apparently does) have financial benefits, it's also easy to imagine money having health benefits. Stress is unhealthy, and cash grants might help low-income families get by with less stress. More money might help low-income families avoid local environmental hazards or to eat more nutritiously. Alternatively, maybe everyone would just smoke lots and lots of extra cigarettes. My instinct is to be optimistic, but honestly I have no idea. I'd love to see some research. But comparing Medicaid to nothing isn't going to prove anything to anyone.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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