Bloomberg News

Medicaid Expansion May Not Reduce Chronic Health Issues of Poor

May 01, 2013

Expanding Medicaid plans for the poor won’t always improve the physical health of enrollees, though it may save them from financial ruin, a study in Oregon found.

Lower depression rates, greater health-care utilization and the elimination of catastrophic medical expenses have been the primary benefits of an experimental expansion of Medicaid that began in Oregon in 2008, according to a study released today by Harvard University and Massachusetts Institute of Technology researchers. The expansion failed to improve chronic health conditions such as hypertension and high cholesterol.

“The purpose of insurance is not to just get you access to health-care, it’s to protect you from financial ruin if you have an expensive health condition,” said Katherine Baicker, a Harvard health economics professor and a study author. “That is something I think is wildly under appreciated.”

President Barack Obama has run into opposition from Republican governors over his plans to expand the federal-state Medicaid health programs, a key component of the Affordable Care Act’s promise to broaden medical coverage to about 27 million people by 2017. The results of today’s study can be used by either supporters or detractors, Baicker said.

“It puts to rest the idea that Medicaid doesn’t help beneficiaries,” she said. “It also puts to rest the notion that expanding Medicaid will improve access to health-care by so much” that you reduce chronic disease and save money.

Oregon’s Health Insurance Experiment chose 30,000 residents of almost 90,000 who signed up to receive Medicaid. By comparing the health records of 6,387 people who won a lottery in 2008 to be included in the experimental expansion, and 5,842 who didn’t get access, researchers were able to get a first-of-its-kind randomized study.

Catastrophic Costs

Catastrophic medical costs, defined as bills exceeding 30 percent of income “were nearly eliminated,” for Medicaid participants, according to the study published by the New England Journal of Medicine. This group was also more likely to be diagnosed with diabetes and take medication for the chronic disease. Still, average blood glucose levels in both groups were comparable.

Annual medical spending per patient increased $1,172 in the Medicaid group, or about 35 percent more than the control group.

The Supreme Court ruled June 28 that the Affordable Care Act’s expansion of Medicaid is optional for states. Under the law, the program would grow to cover most American adults earning close to poverty wages, who generally aren’t eligible now unless they have children. Twenty states, all with Republican governors, had said they won’t expand their programs, according to data as of April 16 from the Kaiser Family Foundation, a nonprofit health research group based in Menlo Park, California.

To contact the reporter on this story: Ryan Flinn in San Francisco at

To contact the editor responsible for this story: Reg Gale at

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