Study Finds Medicaid Improves Health, Decreases Financial Strain for Beneficiaries

by Rebecca Farley on July 8, 2011

A study released this week by the Harvard School of Public Health (HSPH), Massachusetts Institute of Technology (MIT), National Bureau of Economic Research (NBER), and Providence Health & Services found that being covered by Medicaid “substantially increases [individuals’] health care use, reduces financial strain on covered individuals, and improves their self-reported health and well-being.”

The study followed Oregon Medicaid beneficiaries and a control group, collecting data on health services utilization, use of preventive care, the financial strain of paying for healthcare, and more. Based on the first year of the study, the authors found that Medicaid coverage:

  • Increases the likelihood of using outpatient care by 35%, using prescription drugs by 15%, and being admitted to the hospital by 30%.
  • Increases the use of recommended preventive care such as mammograms by 60% and cholesterol monitoring by 20%.
  • Increases the probability that individuals have a regular source of primary care by 70% and the likelihood they report having a particular doctor that they usually see by 55%.
  • Decreases the probability of having to borrow money or skip paying other bills to pay for health care by 40%, and decreases the probability of having an unpaid medical bill sent to a collection agency by 25%.
  • Increases the probability that people report themselves in good to excellent health (compared with fair or poor health) by 25% and increases the probability of not being depressed by 10%.

The study is groundbreaking for its design, in which  individuals on a Medicaid expansion waiting list were selected by lottery to receive Medicaid coverage. About 90,000 people applied for the 10,000 available openings. The researchers collected data on the lottery participants from many sources – including hospital records and mail surveys – and compared outcomes between those randomly selected by the lottery and those not selected in order to determine the impact of Medicaid.

Although many previous studies have compared health and healthcare utilization between people with insurance and those who are uninsured, determining the extent to which health insurance leads to differences in health status is difficult because of many inherent differences between populations with insurance and those without (for example, income or employment). The two-year period of randomized selection in the study allowed for a more rigorous analysis of the effects of Medicaid coverage than past studies have achieved, making its results more robust than previous research.

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