Medicaid Study: Mixed But Promising Results From the Biggest Deal in Health Policy


The most important study in American health policy in decades, the Oregon Health Insurance Experiment, published two-year results Wednesday in the New England Journal of Medicine. If you’re reading up on the topic, get ready for bombastic claims and scorching heat as opposed to illuminating light. The quick read leads to an easy Drudge headline – “MEDICAID DOESN’T MAKE PEOPLE HEALTHIER: OBAMACARE WILL FAIL!” – but a fuller reading of the evidence provides a more optimistic and honest take.

In 2008, Oregon had 90,000 individuals who wanted to enroll in its Medicaid program, but the funding to enroll only a fraction. So it decided to use the opportunity to create an unparalleled experiment: the first Randomized Controlled Trial (RCT) – the gold-standard research methodology that is able to isolate the causal effect of an intervention – in Medicaid history. It endeavored to show nothing less than the actual, causal effect that Medicaid has on its population, a first in the field.

This study, in other words, is a big, big deal.

Two years of data are in, and the results are mixed. First up, the disappointing: Medicaid coverage “had no significant effect on the prevalence or diagnosis of hypertension or high cholesterol levels or on the use of medication for these conditions. It increased the probability of a diagnosis of diabetes and the use of medication for diabetes, but it had no significant effect on the prevalence of measured glycated hemoglobin levels of 6.5% or higher.”

The prevalence of high blood pressure and high cholesterol levels weren’t significantly affected by Medicaid coverage, nor was the use of medication to treat them. Even more surprising, increased diagnosis and treatment of diabetes didn’t affect how well enrollees were managing their disease. That is quite surprising and butts up against our intuition, which holds that diagnosis and treatment of a disease should lead to better control of that disease.

But these figures should be taken in context: because the sample sizes for the above conditions were relatively small, statistically significant outcomes look more disappointing than actual outcomes. For example, the prevalence of hypertension decreased by 7.16% in the Medicaid-covered population, a change "that would be considered clinically significant.” A larger study population could have shown this finding to be statistically significant, too.

In addition, the study unearthed a number of encouraging findings. Compared to the control population, Medicaid enrollees were 30% less likely to self-report depression; more likely to use health care services including more prescription drugs, visits to the clinic, and more cholesterol-level screenings (which increased by almost 50%); and more likely to report higher levels of self-judged health.

(chart from The Oregon Health Insurance Experiment website, via Austin Frakt)

Just as important, being enrolled in Medicaid had a substantial effect on catastrophic medical expenses and medical financial hardship. According to the study, “Catastrophic expenditures, defined as out-of-pocket medical expenses exceeding 30% of income, were nearly eliminated” (emphasis mine). The percent of people who borrowed money to pay bills or skipped payment fell precipitously, by 58%, and the percent of people with any medical debt dropped by 23%. In other words, health insurance is doing what it is supposed to do – protect the consumer from out-of-control, unanticipated medical bills.

That’s a pretty compelling case for Medicaid expansion: less depression, more access to physicians and pharmaceuticals, and a near-elimination of catastrophic, life-changing medical expenditures.

And as Annie Lowrey astutely points out, there’s a lot that this study doesn’t tell us. With only two years of data in, it’s difficult to say what effect Medicaid coverage will have in 10 or 20 years; one could argue that many of the health measures will take more than two years to stabilize, or that the reduced financial strain may lead to long-term reductions in stress levels, which could have an effect on hypertension and heart disease.

Where all of this leaves you probably depends on where you stood before. If you believed Medicaid doesn’t make beneficiaries better off, your evidence for that can (arguably) be found in this study; if you believed that Medicaid leaves beneficiaries better off, you can make that case, too.

But whatever you’re inclined to believe, the truth seems to be somewhere in the middle. Health insurance can only do so much. As Aaron Carroll and Austin Frakt point out at the fantastic health-policy blog Incidental Economist*, it’s “necessary, but not sufficient to improve health” – one piece of a much-larger puzzle. If nothing else, this study should illuminate the need for better health coverage, not just more; merely having the insurance isn’t enough if it’s not paired with the right type of intervention. Health policy researchers, policy wonks, innovators, and practitioners should work together to create products and services that take coverage a step further and, for instance, lead to sustained and marked improvements in diabetes control.

For now, we’re stuck with a bit of ambiguity, along with brash headlines, condemnations of government intervention, and pundits discussing What This Means for Obamacare. This argument won’t be settled today, tomorrow, or next week, so buckle in for the ride.