The effects of expanding public health insurance programs – such as the recent major expansion of Medicaid under the Affordable Care Act (also known as “Obamacare”) – are unclear: it is difficult to separate the effects of insurance coverage from confounding factors such as income and initial health in observational studies comparing those with and without insurance. For example, in theory, expanding health insurance might increase emergency department use by lowering the cost of visits, or it might decrease use by increasing access to physician office visits that replace emergency department care. It is difficult to obtain evidence on the causal impacts health insurance has on these outcomes because enrollees differ in many ways from the uninsured.
In 2008, the state of Oregon decided that the Oregon Health Plan (OHP) Standard Medicaid program could accommodate 10,000 new enrollees. Because the demand for OHP Standard far exceeded the number of slots available, Oregon state officials decided to allocate slots through a lottery. J-PAL affiliates Katherine Baicker and Amy Finkelstein led a large team of researchers and used a combination of administrative data, in-person interviews, and mail surveys to measure Medicaid’s effect on health, employment, and earnings outcomes.
Using this randomized design, they found that enrollment in Medicaid impacted a number of health-related outcomes. Enrollment in Medicaid increased the use of health-care services –including the emergency room – reduced rates of depression, and improved self-reported health. Medicaid also diminished financial hardship, although it had no statistically significant effect on individuals’ employment or earnings.
Below, see Amy Finkelstein’s Ted Talk about the Oregon Health Insurance Experiment and the power of randomized evaluations.
Studies Cited: Baicker, Katherine, Sarah Taubman, Heidi Allen, Mira Bernstein, Jonathan Gruber, Joseph P. Newhouse, Eric Schneider, Bill Wright, Alan Zaslavsky, Amy Finkelstein, and the Oregon Health Study Group. 2013. “The Oregon Experiment – Medicaid’s Effects on Clinical Outcomes.” New England Journal of Medicine 368(18): 1713-1722.
Baicker, Katherine, Amy Finkelstein, Jae Song, and Sarah Taubman, “The Impact of Medicaid on Labor Market Activity and Program Participation: Evidence from the Oregon Health Insurance Experiment”, American Economic Review: Papers and Proceedings, 2014 May; 104(5): 322-328.
Taubman, Sarah, Heidi Allen, Bill Wright, Katherine Baicker, and Amy Finkelstein. “Medicaid Increases Emergency Department Use: Evidence from Oregon’s Health Insurance Experiment.” Science, January 2, 2014. DOI:10.1126/science.1246183