Once Again, Medicaid Proves Its Worth

Could American health care survive without Medicaid? Possibly not.

Medicaid is the government program that covers health care for the poor. It is run by each state, but the federal government picks up over half the tab. Obamacare will expand it dramatically by opening its rolls to almost 16 million more people.

The program faces serious challenges. According to a study published last month, specialists often refuse to see Medicaid patients because the reimbursement rates are so low. (See June 17 blog post) Several states are cutting payments even further in the face of fiscal woes.

Is coverage this limited really worth anything?

The answer is a resounding yes. A study published last week by researchers at Harvard and MIT casts Medicaid in a whole new light. They found that having it offers a huge advantage over being uninsured.

The study compared 30,000 uninsured people in Oregon who were randomly accepted into Medicaid with 45,000 who remained uninsured. It found that those covered by Medicaid received far more health care services overall. They were also much more likely to get preventive care such as mammograms and to have a regular primary care doctor. They were also much less likely to face collection actions for unpaid medical bills. Perhaps even more importantly, many more of them reported being in good or excellent health. (Follow this link for the full report)

There are two lessons in these results. First, Medicaid can be a lifesaver. For all its limits, the coverage can open doors to the health care system that would otherwise be slammed shut.

Second, beyond Medicaid, all health insurance can be a lifesaver. If Medicaid can make this kind of difference over being uninsured, then more generous coverage can do much more. We already knew that being uninsured makes a range of medical and financial harms more likely. This new study demonstrates explicitly how having coverage can help.

Without Medicaid, over 50 million Americans would join the ranks of the uninsured. Hospitals, nursing homes, and other providers that treat them would lose billions of dollars in reimbursement. Many would probably have to close. America would become a less healthy country with a much smaller health care system.

Medicaid is hardly perfect. Neither is Obamacare, which will extend coverage to millions more. But the biggest risk is leaving millions of people with no health insurance at all. That is the surest path to downfall for our health care system and, for many of us, for our health.

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