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Medicaid Expansion May Not Improve Health of Poor in U.S.

May 2 (Bloomberg) -- Expanding Medicaid plans for the poor won’t always improve the chronic health conditions of participants, though it may save them from financial ruin, according to a study of a pilot program in Oregon.

Lower depression rates, greater use of health care and the elimination of catastrophic medical expenses have been the primary benefits of an experimental expansion of Medicaid that began in Oregon in 2008, said researchers at Harvard University and the Massachusetts Institute of Technology. The expansion failed to reduce the chronic health issues faced by enrollees such as hypertension and high cholesterol.

President Barack Obama has been opposed by some Republican governors over his plans to expand the federal-state Medicaid program, a key component of the Affordable Care Act’s promise to broaden medical coverage to about 27 million people by 2017. The data can be used by either supporters or detractors, said Katherine Baicker, a Harvard health economics professor.

“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 Baicker, an author of the study released yesterday in the New England Journal of Medicine. “That is something I think is wildly under appreciated.”

Oregon’s Health Insurance Experiment chose 30,000 residents from 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, researchers said. 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.

“It puts to rest the idea that Medicaid doesn’t help beneficiaries,” Baicker 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.

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 rflinn@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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