Industries afflicted with Baumol's Disease have slower productivity growth.

Medicaid: What Will Happen in 2014?

by Elaine Schwartz    •    Jun 8, 2013    •    TIME TO READ: 3 minutes

I suspect that the more you study Medicaid the less you know.

We better start with by saying Medicaid is not what most of us think it is. Yes, it involves medical care for the poor. But, federal law says Medicaid assistance can go only to low income people with certain conditions like pregnancy, blindness and specified disabilities. Then, since each state implements the program with federal dollars and its own money, the state further defines who gets the aid and what they get. As a result, as one researcher said about state Medicaid programs, if you know one…you just know one. There are 49 others + D.C. Some cover all the poor while others have qualifications.

The Affordable Care Act extends the Medicare "umbrella."

The Affordable Care Act extends the Medicaid “umbrella.”

Still trying to assess Medicaid’s impact, researchers were particularly excited about the Oregon Medicaid study. Because Oregon was adding 30,000 families to Medicaid through a lottery, it could provide data for a randomized analysis of the impact of medical insurance on health.

The Oregon numbers were:

  • 90,000 people applying for Medicaid.
  • 30,000 selected.
  • 18,000 eligible.
  • But not all filled out the papers or applied appropriately or had the right income so…
  • Ultimately have 6,000 in the Medicaid group and 6,000 in the control group.
  • But then, only wind up with 1500 in the “treatment” group and 1500 in the “control” group.

Just reported, the study concluded that Medicaid had a beneficial impact on family finance and mental health. However, researchers could not confirm, based on cholesterol, blood pressure and blood sugar, that people were healthier.

Why? Maybe health insurance does not improve health. Perhaps the study was “underpowered” and had insufficient participation to prove Medicaid’s impact on health. Or maybe it was not quite so random because more “prudent” individuals entered the program.

Listening to all of this through the eyes of Austin Frakt and Jim Manzi for 2 1/2 hours, and then reading their blogs and related articles, I began to see the complexity of judging Medicaid’s impact.

And yet, the Medicaid mandate of the Affordable Care Act is scheduled for implementation in 2014.

Explained by Austin Frakt, “… every state was mandated to expand Medicaid up to 138% of the poverty level… And every state had to offer Medicaid to everyone with that income or below…”

But then the Supreme Court says, “we don’t like the way the extension is done. Let’s make it optional. States have the option to expand under the way the law specifies; or they could not extend, and just keep the existing program, leaving many people without the option of Medicaid. And so now every state is deciding whether to expand or not. Now, what ‘expand’ means is not just one thing. There’s actually quite a bit of room in terms of how Medicaid is specifically designed…”

Unmarked states are proceeding with the Affordable Care Act Medicaid mandate. Gray states are undecided. Marked states have said no.

Unmarked states are proceeding with the Affordable Care Act Medicaid mandate. Gray states are undecided. Marked states have said no. (As of March 5, 2013)

Yesterday, writing about states that are opting out of the Medicaid provision of Obamacare, Paul Krugman said 19,000 lives are saved annually by Medicaid. Yes, one study from Harvard supported his statement.

But…

It is impossible for one Medicaid study to be definitive. So, should we support the billions that will be spent? My answer is we will never have quantitive proof of Medicaid’s impact.

What to do?

I ask each person in my class to consider her vision of the virtuous society. If providing health insurance to the poor, even if you are not positive of the impact or of the cost (economic definition–what else you sacrifice) is within your hope for society, then support Medicaid. If, on the other hand, again, not being able to prove that you are right, you believe in less of a medical safety net, a different medical safety net, or no medical safety net then you too are in virtuous territory.

Your opinion?

Sources and Resources:  Well worth 2 hours, these Econtalk podcasts from Austin Frakt and Jim Manzi clearly conveyed how tough it is to evaluate Medicaid. Other articles on the Oregon study were here, here and here while my infographics were from the JAMA /Kaiser Family Foundation series “Visualizing Health Care Policy.” In addition, for a bit of controversy, you can read the Krugman column and for a touch of humor that is fundamentally quite serious, here is one physician talking with Stephen Colbert about a single payer system.

« »