Economics Magazine

Oregon Health Insurance Experiment Findings A Massive Blow To Obamacare Centerpiece: Medicaid Expansion

Posted on the 02 May 2013 by Susanduclos @SusanDuclos
By Susan Duclos
An Oregon Health Study report just released, the Oregon Health Insurance Experiment, or OHIE, referred to by the New York Times as a "landmark study" because it is the only randomized, controlled study ever conducted on the effects of having health insurance versus no health insurance, has put a huge black cloud over the Medicaid Expansion, which is the centerpiece of Obamacare aka Affordable Care Act.


Approximately 2 years after the lottery, we obtained data from 6387 adults who were randomly selected to be able to apply for Medicaid coverage and 5842 adults who were not selected. Measures included blood-pressure, cholesterol, and glycated hemoglobin levels; screening for depression; medication inventories; and self-reported diagnoses, health status, health care utilization, and out-of-pocket spending for such services. We used the random assignment in the lottery to calculate the effect of Medicaid coverage.


We found no significant effect of Medicaid coverage on the prevalence or diagnosis of hypertension or high cholesterol levels or on the use of medication for these conditions. Medicaid coverage significantly increased the probability of a diagnosis of diabetes and the use of diabetes medication, but we observed no significant effect on average glycated hemoglobin levels or on the percentage of participants with levels of 6.5% or higher. Medicaid coverage decreased the probability of a positive screening for depression (−9.15 percentage points; 95% confidence interval, −16.70 to −1.60; P=0.02), increased the use of many preventive services, and nearly eliminated catastrophic out-of-pocket medical expenditures.


This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.

Bottom line,  the services were used more, with taxpayer's footing the bill, but there was no significant improvements in their physical health.

Cato Institute cuts through that liberal spin quite succinctly:

There is no way to spin these results as anything but a rebuke to those who are pushing states to expand Medicaid. The Obama administration has been trying to convince states to throw more than a trillion additional taxpayer dollars at Medicaid by participating in the expansion, when the best-designed research available cannot find any evidence that it improves the physical health of enrollees. The OHIE even studied the most vulnerable part of the Medicaid-expansion population – those below 100 percent of the federal poverty level – yet still found no improvements in physical health.

Hit and Run makes another point:
The Medicaid recipients also ended up utilizing a lot more health care—care that has to be paid for—than those who didn't get coverage. But they didn't use the emergency room any less than the control group.

The emphasized sentence above is key because the Medicaid expansion argument by Obamacare supporters was that since people with no health insurance were using the emergency room, uable to pay, and the costs were then transferred to the state anyway for those services, by paying those costs preemptively with enrollment into Medicaid, it would offer them preventative services and they would have improved physical health, therefore would not need to use the emergency room as often.

This study just blew that whole flawed argument out of the water.
According to The Advisory Board Company, who is keeping track of where each state stands on Medicaid expansion using public statements, 25 states have decided to participate, 14 states have decided not to, 3 states are leaning toward non-participation and 2 states seem to be leaning toward participation.
Liberals have been creative with their spin and their headlines trying to mitigate the damage, but the conclusions of this landmark study are devastating in their scope, since the excuse for the Medicaid expansion highlighted in Obamacare was that it would significantly improve the physical health of those enrolled, which in turn was supposed to lower the overall costs of healthcare long term.
Liberal Obamacare supporters may be spinning madly but Zeke Emanuel, a former Obama health policy adviser, sums it up,  the Washington Post "It's disappointing."
The release of this study comes just one day after Harry Reid criticizes Republicans for refusing to pump more money into Obamacare to "educate the public."
This OHIE study just did so and didn't cost American taxpayers one red cent.
[Update] This just keeps getting better as Hot Air reminds readers : Do note, one of the co-authors of the study is ObamaCare architect Jon Gruber.

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