The Oregon Medicaid Experiment: A Success or Failure?

A recent study in the New England Journal of Medicine (N Engl J Med 2013;368:1713-22) has been getting a lot of press lately, and not because it reported on a new blockbuster drug. Rather, it reported the results of an unusual – and unintended – experiment about the utility of Medicaid.

A little background: one of the cornerstones of the affordable care act (aka “Obamacare”) is the expansion of Medicaid eligibility to include more low-income individuals. Since Medicaid is a state-run program partially financed with federal funds (as opposed to the “fully federal” Medicare program), eligibility has traditionally varied widely by state with much more generous eligibility and coverage in states like New York (read “blue states”) than say, Alabama. The law intended to set a national floor for eligibility, which would have provided health insurance to millions of Americans who previously did not qualify. I say “intended” because the Supreme Court, in its ruling earlier this year upholding the constitutionality of the law, struck down the provision mandating that states expand their Medicaid programs. States are now free to choose to expand eligibility, with nearly the entire tab picked up by the federal government, or not. For reasons that I frankly find hard to understand, several states have decided not to expand coverage, leaving many among the uninsured. Enter the study in the New England Journal.

The study was performed by health services researchers from RAND, and looked at health outcomes among individuals who were randomly provided access to Medicaid in Oregon in 2008, compared with a group not offered access. The randomization occurred because of budget constraints, and presented a “natural experiment” to see if the group with access to insurance fared better. The punchline is that two years of coverage did not result in measurably better health, with similar cholesterol, HgA1c and blood pressure in the two groups.

Some pundits have pointed to the results to question the value of expanded Medicaid, but I think they miss some big points. First, two years is not a lot of time in which to see divergence of health outcomes. Second, the insured group increased the use of preventive services that may have health benefits in future years. Third, the insured were nearly completely protected from “catastrophic out of pocket medical expenditures.”

So, it seems to me that the Medicaid coverage did exactly what one obtains health insurance for – it afforded access to preventive services, and protection from calamity. To read this study as a justification for limiting Medicaid expansion seems to me to be wrongheaded.

What do you think?

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