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Study Finds Medicaid Benefits Improve Chances for Medical Care, Improved Mental Health

By Rebecca Adams. CQ HealthBeat Associate Editor

July 7, 2011 -- Enrolling in Medicaid increases the chances that patients will get preventive care, see a doctor, and be more content, according to the most comprehensive study in nearly four decades to evaluate the program’s impact.

The new 56-page paper by the National Bureau of Economic Research assessed an Oregon lottery program that allowed some low-income adults in 2008 to vie for the chance to receive Medicaid benefits. The study compared the experiences of people who were granted Medicaid coverage with those who signed up for the lottery but did not win coverage.

The study comes as Congress debates cuts to Medicaid, the federal-state program for the low-income, people with disabilities and nursing home patients. The health care law (PL 111-148, PL 111-152) also called for a major expansion of Medicaid. Some critics, particularly
Republicans, have said many physicians won’t accept Medicaid and that the program is so inferior to other types of coverage it would be only a modest improvement over being without benefits at all.

The Oregonians who enrolled in Medicaid had a 30 percent higher chance over 16 months of being admitted to the hospital, a 15 percent greater likelihood of taking prescription drugs, and a 35 percent increase in the probability of having an outpatient visit. Medicaid patients were 25 percent less likely to have an unpaid medical bill sent to a collection agency (a result that doctors and other providers probably appreciate,) and 35 percent less likely to have out-of-pocket medical costs.

Medicaid patients got more preventive care and saw regular physicians more than the uninsured. Patients with coverage were 20 percent more likely to get their cholesterol checked and women were 60 percent more likely to get mammograms. Medicaid beneficiaries were about 55 percent more likely to have a doctor they routinely visited for medical needs.

As a result, Medicaid beneficiaries reported a 32 percent increase in their overall happiness. But the authors said it was hard to tell how much of that came from better physical health, lower levels of stress due to financial burdens, or other factors.

Health care costs for the approximately 30,000 people who got benefits rose by about 25 percent. “This back-of-the-envelope calculation suggests that insurance is associated with a $778 (standard error = $371) increase in annual spending” per patient, the paper said.

The authors included Massachusetts Institute of Technology economist Amy Finkelstein, who served as a staff economist during the Clinton administration on the Council of Economic Advisers (CEA); Harvard economist Katherine Baicker, who served on the CEA during the George W. Bush administration from 2005-07, and MIT economist Jonathan Gruber, who consulted for the Obama administration.

NBER Paper (pdf)

Rebecca Adams can be reached at [email protected].

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