Does Medicaid Make People Healthier?

Jul 3, 2012
Originally published on July 11, 2012 4:08 pm

A while back, Robin Boros lost her job, and she and her husband couldn't afford health insurance.

One time, Boros passed out, and her husband called an ambulance.

"The hospital bill, it was atrocious," she says. "We couldn't pay it."

They never figured out why Boros passed out. But after that, she and her husband avoided going to the doctor. At times, she says, she even bought blood pressure medication on the street.

"That was awful," Boros says. "But you do what you got to do."

Boros lives in Oregon. In 2008, the state found itself with thousands of extra slots for Medicaid, the government health insurance for the poor. So Oregon held a lottery to fill the slots. Some 90,000 people applied. Boros was one of the ones who won a slot.

Now that she's on Medicaid, she has a doctor she sees regularly. Her blood pressure's under control. Having Medicaid, she says, is way better than having no insurance at all.

This seems straightforward enough. Yet for decades, there has been a debate over Medicaid: Does it really help people?

The debate is especially critical now. In the next few years, millions more people are likely to be covered by Medicaid, the government's health insurance program for the poor. (Here's more on what Thursday's Supreme Court ruling means for the Medicaid expansion.)

On the face of it, it seems like Medicaid would make people healthier, by giving them access to health care they wouldn't otherwise be able to afford.

But there is a counterargument. It says that being on Medicaid is really worse for you than being uninsured, because it provides you with such low-quality health care.

The debate has raged for decades because every study has lacked a control group. There was no way for researchers to randomly assign people to either receive Medicaid or go without. The Oregon lottery allowed them to do just that.

Katherine Baicker, a professor of health economics at Harvard University, compared those who won the lottery, and those who entered but did not get covered.

Fifty thousand mail surveys and 750 in-person interviews later, they concluded that Medicaid did, in fact, make people healthier.

"People reported their health to be much better once they were insured," Baicker says. "The probability that they reported themselves to be in good, very good or excellent health increased by 25 percent."

People on Medicaid were far less likely to borrow money or have a medical bill sent to a collection agency. And total health care spending (including what is covered by insurance) increased for people on Medicaid.

These results are all self-reported, and it's still somewhat early. Researchers are still tracking the Oregon group, and more data should continue to emerge.

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One element of the Supreme Court's ruling last week dealt with the health care law's dramatic expansion of Medicaid. The court said states cannot be punished if they decide to skirt the law's requirement to add more people to the program. There's been a debate for a long time among health care economists about the wisdom of expanding Medicaid.

As Alex Blumberg, with our Planet Money Team reports, a huge new study, conducted after the health care bill was passed into law, has helped settle at least one part of that debate.

ALEX BLUMBERG, BYLINE: It might seem straightforward: giving Medicaid to people who don't already have health insurance, that would be good for their health, right?

KATHERINE BAICKER: In fact, the data's not so clear, and there's more controversy in the public debate about this than you might think.

BLUMBERG: This is Katherine Baicker, a professor of Health Economics at Harvard University. And she says that for decades there was an argument that being on Medicaid was actually worse for your health than having no insurance at all. There were studies that suggested Medicaid patients had worse outcomes when they went to the hospital than people without insurance.

But these studies were not conclusive, for one simple reason: they lacked a control group. There was no way to compare a random group of Medicaid patients to a similar group of people who lacked Medicaid. And so, for decades, the debate raged. And it might be raging still, if not for the state of Oregon, which decided in 2008 to hold a very unusual lottery.

BAICKER: What happened in Oregon was that they had limited budget to enroll new populations in their Medicaid program for low-income adults. So they decided that the only fair thing to do would be to have a lottery from among people on the waiting list.

BLUMBERG: Where the state of Oregon saw the fairest way of allocating a scarce resource, Baicker and her colleagues saw a perfectly randomized selection mechanism. Finally, they'd have what they lacked all these years, a control group; a group of people who wanted Medicaid but couldn't get it.

The study they finally conducted was one of the largest of its kind. Researchers sent out over 50,000 mail surveys, conducted over 750 detailed in-person interviews. Much of the data is still being analyzed. But an initial round of results, published last year, was pretty dramatic.

BAICKER: People reported their health to being much better once they were insured. The probability that they reported themselves in good, very good, or excellent health increased by 25 percent.

BLUMBERG: Now, this is all self-reported, so not scientifically conclusive. But there was another finding from the study. This finding is based on credit report data. People on Medicaid were far less likely to have to borrow money or to have a Medical bill sent to a collection agency. They were far less likely, in other words, to find themselves facing the situation Robin Borros faced a couple years ago. She lost her job and was newly uninsured. She passed out.

ROBIN BORROS: My husband called the ambulance and then came and got me, and took me to the hospital. And the hospital bill was like - I mean, it was atrocious. It was in the thousands. We couldn't pay it.

BLUMBERG: Borros never did discover why she fainted. But afterwards, she and her husband tried as hard as possible to avoid having to see the doctor. They'd wash their hands constantly and not just their hands.

BORROS: Wash doorknobs, you wear masks, things like that.

BLUMBERG: You would wear masks around the house?

BORROS: Oh yeah, if the kids were sick.

BLUMBERG: When Borros's husband gashed his hand with a saw, he patched it up himself instead of going to a doctor for stitches. And when Borros' blood pressure medication would run out, she'd try to borrow some from friends and relatives with their own prescriptions. And if that didn't work...

BORROS: Try to get it off the streets.

BLUMBERG: So, you would actually go to like...


BLUMBERG: ...drug dealers for your blood pressure...

BORROS: Go to someone - yeah, someone that - you just look around out on the streets.

BLUMBERG: What was that like the first time you went to a drug dealer?


BORROS: That was awful. That was awful. I mean, I didn't - you know, you do what you got to do.

BLUMBERG: There is still a debate to be had about Medicaid. Is a government program the best way to provide insurance for the poor? Could some form of the private market deliver the same or better outcomes more cheaply?

But Robin Borros was one of the lottery winners in the Oregon experiment. And for her, like many of the people surveyed, on one question there is no debate. Now that she's on Medicaid, she says she has a doctor she sees regularly. Her blood pressure's under control. Having Medicaid, she say, is way better than having no insurance at all.

For NPR News, I'm Alex Blumberg. Transcript provided by NPR, Copyright NPR.