Medicaid is Very Good for Your Health

As we all engage in defense of the Medicaid program at the state and federal levels, a new study confirms how vital these efforts are. A star-studded team of economists from MIT and Harvard, including advisors to Presidents Obama and Bush, conducted what is likely to become the gold standard for research with respect to the impact of Medicaid. The study examined the effect of Medicaid on adults below the poverty line.  An unusual opportunity for research occurred in Oregon in 2008 when a lottery was held to randomly select 10,000 people from a waiting list of 90,000. This  unusual circumstance created a once in a lifetime opportunity for researchers to compare the impact of getting Medicaid to the impact of not having Medicaid for a similarly situated control group that remained uninsured.

The study concludes that those on Medicaid had “statistically significantly higher health care utilization, lower out-of-pocket medical expenditures and medical debt, and better self-reported health than the control group that was not given the opportunity to apply for Medicaid”. On the health side, those enrolled in Medicaid were much more likely to receive recommended preventive care (such as a 60% increase in the probability of women receiving mammograms), and more likely to receive services such as outpatient visits (35% increase in probability), prescription drugs and hospital admissions – sharply refuting the argument critics make that a Medicaid card is not worth anything. Medicaid beneficiaries also self-reported better physical and mental health status, lower rates of depression and other positive outcomes.

On the financial side, the study found that having Medicaid coverage was an important contributor to more stable economic circumstances – most notably a 40% decline in the probability of having to borrow money or skip paying other bills in order to pay medical expenses. Medicaid’s strong cost-sharing protections also resulted in a sharp decline in the probability of having out of pocket medical expenses.

As I often say, policy debates are frequently “fact-free.” But this new study provides irrefutable evidence that Medicaid is essential to the physical, mental and financial health of the families it serves.  All those policymakers contemplating further cuts to Medicaid should take the time to read this worthwhile study.

Joan Alker
Joan Alker is the Executive Director of the Center for Children and Families