By Tara Mancini

Tomorrow we celebrate the anniversary of Medicaid and its 48 years of providing health care access to those with low-income and the medically needy.  Medicaid is less often recognized for its ability to provide economic stability to families, even though research has documented its ability to curb the burden of medical expenses. It is apropos then to highlight new research published in the Journal of Health Economics finding that Medicaid is the third most successful anti-poverty program in the country.

Using data from the 2011 Current Population Survey (CPS) and the Supplemental Poverty Measure (SPM), the authors (Sommers and Oellerich) compare outcomes for those currently enrolled in Medicaid to a hypothetical scenario in which current Medicaid enrollees are either uninsured or enrolled in Medicare or private insurance.

They estimate that Medicaid reduces medical-out of-pocket costs (MOOP) by almost $500 for each beneficiary.  They also estimate that in 2010, Medicaid lifted 2.12 million of the nation’s non-institutionalized individuals out of poverty, a net decrease of 0.7% points. Among the eligibility categories they examined, disabled adults experienced the biggest reduction in poverty (2.2 percentage points), followed by children (1.1), the elderly (0.7) and nondisabled adults (0.4). Medicaid reduced the number of those living in extreme poverty, below 50% of the FPL, by 1.35 million.  Additional subgroup analyses indicated that Black non-Hispanics, Hispanics, women, and those living in the Northeast experienced the greatest anti-poverty effects.

For those states that continue to grapple with the decision to extend Medicaid to childless adults, the evidence is definitely something to take into account. Much of the debate has centered on budget estimates that have ranged from projected savings to modest increases, but the additional economic and societal benefits of improving individuals’ financial stability has not received the consideration it deserves.