Medicaid Expansion Doesn’t Save Lives

It is a favorite talking point of the left that the expansion of Medicaid will “save lives”. Liberal journalist Scott Maxwell of The Orlando Sentinel made this exact assertion recently in a column. It’s easy to see why Maxwell might believe that. Without information to verify that assumption, one would assume that giving people Medicaid insurance would improve their health and, in some cases, even save lives.

But research often refutes our sincere assumptions. In 2008 the State of Oregon was faced with a dilemma. They wanted to expand Medicaid eligibility to more residents but they didn’t have enough money to pay for everyone. So they held a lottery for low-income, uninsured adults. This created an ideal situation for studying the impact of Medicaid in a randomized, prospective manner.

This study, known as The Oregon Health Insurance Experiment, is an ongoing study, which has already revealed significant information. Thus far, researchers have learned that having Medicaid does not improve health, at least in standard measurements of blood pressure, blood sugar, and cholesterol. Medicaid reduced observed rates of depression by 30% but increased the probability of being diagnosed with depression. Medicaid significantly increased the probability of being diagnosed with diabetes and the use of diabetes medication, but did not have the expected impact of lowering blood sugar.

It has always been postulated that the uninsured are more likely to use Emergency Rooms at hospitals for their health care than the insured. By this reasoning, expansion of Medicaid would lower the use of hospital Emergency Rooms and contribute to solving this chronic problem, which poorly utilizes health care resources and increases costs. Unfortunately, the Oregon study showed the opposite. Those with newly enrolled Medicaid were 40 percent more likely to use the Emergency Room than the uninsured. This means expanding Medicaid will actually exacerbate this problem and increase the cost of delivering health care.

How to explain this surprising truth? John C. Goodman, founder of The National Center for Policy Analysis, explains this in his book, Priceless. Goodman says having Medicaid may actually be worse than having no insurance at all. That’s because most doctors do not accept Medicaid patients and the ones who do often ration their appointments making waiting times very long. Medicaid patients respond by going to the Emergency Room where they are sure to be seen the same day.

The uninsured actually have greater access to health care. They can see practically any physician any time by negotiating a discounted cash rate that will still pay the doctor more than Medicaid. The result is less need to use Emergency Rooms for primary care. Medicaid patients are barred by law from paying doctors more than Medicaid allows.

Most people assume that you have to have health care insurance to get good health care. But this assumption has been disproven by multiple studies. A RAND Corporation study found virtually no difference in the quality of care received by the insured and the uninsured among people who seek care. In a thorough study of the impact of health insurance, former Clinton adviser Richard Kronick found that insurance had virtually no effect on mortality.

There are more perverse outcomes from having Medicaid. Avik Roy, health care blogger for Forbes magazine, has reported the following studies:

  • A University of Virginia study found that individuals enrolled in Medicaid are almost twice as likely to die after surgery as privately insured patients, and about one-eighth more likely to die than the uninsured!
  • A study published in the Journal of the National Cancer Institute found that Florida Medicaid patients were 6 percent more likely to be diagnosed with prostate cancer at less treatable, later stages than the uninsured. Medicaid enrollees were nearly one-third more likely to be diagnosed with late-stage breast cancer and 81 percent more likely to be diagnosed with melanoma at a late stage than the uninsured.
  • A study in the journal Cancer found that the mortality rate for Medicaid patients undergoing surgery for colon cancer was more than three times as high as for the privately insured and more than one-fourth higher than for the uninsured
  • A study in the Journal of Vascular Surgery found that Medicaid patients treated for vascular problems, including plaque in their carotid arteries and femoral arteries, fared worse than did the uninsured.

These are not the only studies Roy has found that lead him to conclude that Medicaid patients do no better and sometimes worse than the uninsured.

It seems that many in the Medicaid eligible population have figured this out. A report in The New England Journal of Medicine by Sommers and Epstein states that there are over nine million Americans eligible for Medicaid who are currently not enrolled. They could have Medicaid at any time just by signing up but for various reasons they have failed to do so. Undoubtedly, some of the reasons include the inconveniences of enrollment, the long waiting times on telephones or in government offices. But some have already concluded, rightly, they may be better off without insurance at all.

Despite these ominous conclusions about Medicaid, the Affordable Care Act (ObamaCare) actually seeks to expand Medicaid. In fact, the original goal was to increase Medicaid enrollment by about 15 million Americans. The Obama administration will never achieve this goal, however, because they lost their bid in the Supreme Court to compel the states to accept Medicaid expansion or lose all Medicaid federal funding. The result is only half the states have accepted the expansion of Medicaid.

The Obama administration never expected this outcome. The law was written with strong incentives for states to comply with expansion. In addition to mandates for state compliance along with threats of losing all federal support, the subsidies for insurance premiums on the state exchanges were also dependent on state participation in Medicaid expansion and creation of state exchanges. Democrats intentionally linked these subsidies to state expansion of Medicaid believing this would insure state participation.

But many governors are more concerned about the future cost of Medicaid expansion and prudently declined this federal offer. They already will have to bear the burden of increasing Medicaid enrollment of those un-enrolled by the old eligibility standards. The states will have to pay for these new enrollees by the current federal subsidies, which average only 57 percent of the costs. These costs could be substantial in some states like Florida and Texas where current enrollment is less than 50 percent of those eligible.

ObamaCare seeks to expand Medicaid coverage of the uninsured but doesn’t provide the means to increase access to health care. In fact, it will probably decrease access since an increased volume of patients will not be accompanied by an increased source of providers. There are no provisions in the law to increase the training of doctors or other health care providers.

Goodman explains how ObamaCare will actually decrease access to health care:

  • The major barrier to care for low-income families is the same in the United States as it is throughout the developed world: the time price of care and other non-price rationing mechanisms are far more important than the money price of care.
  • The burdens of non-price rationing rise as income falls, with the lowest-income families facing the longest waiting times and the largest bureaucratic obstacles to care.
  • ObamaCare, by lowering the out-of-pocket money price of care for almost everybody while doing nothing to change supply, will intensify non-price rationing and may actually make access to care more difficult for those with the least financial resources.

 

In other words, price is not the most important barrier to healthcare; long waiting times to see a doctor are. This “non-price rationing”, in the words of an economist, gets worse for those with the least financial resources. This means ObamaCare will actually make getting health care more difficult for those the law was most intended to help.

More people will have Medicaid insurance but with less access to health care, at an increasing cost to the federal and state governments, with no real measurable improvement in their physical health. This is a formula for medical and fiscal disaster, not a solution to the problems of our health care system and our financial future. We must find solutions that better address the need for access to health care in ways that will not bankrupt the nation or the states.

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