New study details the costs and benefits of Medicaid

In Oregon, researchers followed 10,000 new enrollees in Medicaid. They used more health care services, but had more to spend on other necessities.

Back in 2008, Oregon did what the rest of the country is about to do in 2014 when the Affordable Care Act kicks in: It expanded its Medicaid program. Only Oregon did it through a lottery. Meanwhile, researchers did a little study to gauge the impact of that expansion, and the results appear tomorrow in the New England Journal of Medicine.

 

According to the study, here's what happens when people get access to Medicaid: they go to the doctor more, they're less financially strained, and not surprisingly, they're less depressed.

 

Katherine Baicker, a health economist at Harvard, co-authored* the study in the New England Journal. She says those are just a few of the benefits they found to expanding Medicaid. "Part of the purpose of Medicaid is not just to gain you access to health care, but to ensure that you're not evicted from your apartment when you pay your medical bills instead of your rent," she says.

 

Baicker says expanding Medicaid also was good news for doctors and hospitals, who get paid rather than have bills go to collection. And the study found that patients don't have as many credit problems. "So those financial protections are really important to people," Baicker says.

 

But there's also a cost. People on Medicaid used about $1,200 more a year in medical care  than those who were uninsured, according to the study. And that's just with Oregon's limited sample of 10,000. Baicker says it's unclear what those costs would be if millions more are added to the Medicaid rolls.

 

Andrew Barnes, who teaches health care policy at Virginia Commonwealth University, agrees Medicaid comes with a big price tag. But he says it's tougher to gauge the benefits. "Are people living longer? Are people living happier and healthier? Do people have less medical debt?" he says.  

 

These are all factors, Barnes says, policy makers ought to consider in talks about Medicaid expansion.

 

*Correction: An earlier version of this story identified Katherine Baicker as author of the study. She is the study's co-author. The text has been corrected.

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