Medicaid Improves Health of Previously Uninsured, Low-Income People, RWJF Scholar Finds

Investigator Awardee completes first-ever randomized control trial to examine Medicaid's impact.

    • July 12, 2011

Government provided health insurance is good for the physical, mental and financial health of those who were previously uninsured, according to a unique and groundbreaking study co-authored by an alumna of a program supported by the Robert Wood Johnson Foundation (RWJF).

Medicaid recipients are more likely to receive health care services, have fewer out-of-pocket medical expenses and debt, and say they are in better physical and mental health than the uninsured, according to the first large-scale randomized control study to assess the impact of Medicaid.

“Our results suggest that Medicaid provides benefits to this population above and beyond the non-Medicaid alternatives that exist through various safety net options,” the study authors write.

The findings—published July 7 by the National Bureau of Economic Research—come amid intense debate over proposed cuts to Medicaid as lawmakers struggle to balance the budget and manage the federal debt.

Some argue that Medicaid has obvious positive benefits for those covered. Others argue that few physicians accept Medicaid, making health care difficult to obtain for those covered by the government program, and that low-income people can rely on an adequate safety net of care consisting of emergency rooms, free clinics and charitable services.

Until now, no research has provided a definitive answer as to which argument carries more weight.

“I think, and hope, that objective, rigorous scientific evidence such as that provided by our study can (and will) contribute to informed public policy discourse and decision making,” said Amy Finkelstein, Ph.D., M.Phil, the lead author of the study. She is a professor of economics at the Massachusetts Institute of Technology and a 2003 recipient of a RWJF Investigator Award in Health Policy Research. “In the place of anecdote, ideology and rhetoric, we now have compelling and objective data on an important social science and public policy question: What is the effect of providing Medicaid to previously uninsured low income adults?”

The findings show that Medicaid recipients are more likely to go to the hospital, take prescription drugs, have an outpatient visit and comply with recommended preventive care such as mammograms and cholesterol monitoring. Recipients are also less likely to face medical liabilities and out-of-pocket medical expenses and less likely to have an unpaid medical bill sent to a collection agency. In addition, recipients self-report better physical and mental health than uninsured low-income people.

The study came about after a unique opportunity arose to conduct a randomized controlled trial of Medicaid recipients—the kind of study often used in medicine and science but rarely possible in the social sciences.

Previous studies had compared health and health care use between the uninsured and the insured, but it is never possible to fully control for differences between the two groups on dimensions such as income, employment and initial health—making it difficult to isolate the effects of government provided insurance itself.

But in 2008, Oregon—facing a budget crisis of its own—created a waiting list to select Medicaid recipients and drew names by lottery.

This gave Finkelstein and her co-authors the raw data they needed to conduct the first-ever randomized controlled design study of the government insurance program. “The particular policy circumstances in Oregon created just such a randomized controlled design that we were able to capitalize on,” Finkelstein says.

Finkelstein’s co-authors for this study are Sarah Taubman, Sc.D., Bill Wright, Ph.D., Mira Bernstein, Ph.D., Jonathan Gruber, Ph.D., Joseph P. Newhouse, Ph.D., Heidi Allen, M.S.W., Ph.D., Katherine Baicker, Ph.D., and the Oregon Health Study Group.