Medicaid Improves Health Outcome

One of the most ridiculous aspects of the recent debate over the Affordable Care Act went as follows. Many people in the United States of America believe quite sincerely that over-taxation of rich people is among the most serious problems the country faces. And the Affordable Care Act does a great deal to increase taxes on rich people and use the funds thereby raised to provide Medicaid to currently uninsured people. Those who oppose such measures want to deny life-saving medical care to the poor and near-poor in order to maintain a low tax burden on the wealthy. In order to justify this proposition politically, it would be useful to pretend to believe that giving uninsured people access to Medicaid doesn’t actually benefit them at all. Consequently, lots of diligent Googlers started turning up studies that purported to show this, ignoring contrary studies and all common sense.

At any rate, a new rigorous study from Oregon confirms that Medicaid does, indeed, save lives:

A landmark study released this morning on a major health policy experiment in Oregon provides some hint at what the answer to these questions might be if the ACA becomes a reality. A consortium of researchers from MIT, Harvard, and the state of Oregon has studied the impact of randomly assigning Medicaid insurance to poor Oregonians in 2008 as part of an expansion of the state’s health coverage. They found that Medicaid’s impact on health, happiness, and general well-being is enormous, and delivered at relatively low cost: Low-income Oregonians whose names were selected by lottery to apply for Medicaid availed themselves of more treatment and preventive care than those who remained excluded from government health insurance. After a year with insurance, the Medicaid lottery winners were happier, healthier, and under less financial strain.

The other thing to note here is that, relative to other options, Medicaid is super cheap to provide:


What this means is that distributional issues aside, taxing people to provide people with Medicaid is an efficient means of organizing health care financing. The problem with Medicaid (and, indeed, the general problem with single-payer programs) is precisely that it’s so cheap that health care providers don’t like it very much. They’d rather accept patients who have higher-paying private insurance. But there are steps the federal government could take to ensure that providers who want access to the government’s vast array of subsidies need to see Medicaid patients.