Sunday, May 5, 2013

Increasing access to health insurance: does it make people healthier?

The results of a Medicaid experiment in Oregon have the econ blogosphere ablaze.  In 2008 the state had enough funding to expand Medicaid to 10k people.  Problem was that way more than 10k applied, so there was a lottery to decide.  Economists then started following both the winners and the losers, so they could learn how much difference Medicaid coverage made. 

The study has been running two years now, and here is a succinct summary of the results from the Daily Beast's Megan McArdle:
No statistically significant treatment effect on any objective measure: not blood pressure.  Not glycated hemoglobin.  Not cholesterol. 
These findings have surprised nearly everyone.  The theory was that lack of insurance coverage prevented poor people from getting treatment for conditions which, as a result, will adversely impact their health.  Increased coverage did increase spending on health care, but health itself did not improve.  Perhaps the benefits of health care are an illusion?  Perhaps the guidance from doctors was not followed?

One good bit of news: health care spending went down a lot among the experimental group.  Also depression went down, even though there was no change in the use of anti-depressants.  Maybe the new Medicaid recipients were relieved because they did not have to worry about paying their doctor bills? 

Although one should be wary about putting too much weight on one study, similar results were obtained in a large scale experimental study conducted by the RAND Corporation in the early 1970s. 

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