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Medicaid’s Oregon Trail
The Left, science, and the inevitable failure of Obamacare


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Daniel Foster

Medicaid is already a $450-billion-per-year program, and a major chunk of the coverage expansion Obamacare promises comes by way of expanding it. So it would be nice to know if it worked, right? On Wednesday, a group of researchers released a new study on expanded Medicaid eligibity that suggests that it, sort of, well, doesn’t. Here’s what you need to know about it.

What the Study Doesn’t Show
The Oregon study compared health outcomes along several measurable indicators — including blood pressure, blood sugar, and cholesterol level — between people enrolled in Medicaid and the uninsured. What’s nice about this study is that the experimental and control groups are randomized, or close to it, because the state held a lottery to enroll a proportion of those newly eligible for Medicaid. There is some potential for bias in the fact that only some of those who “won” the lottery actually enrolled, but this should tilt in favor of Medicaid proponents, because people who are likelier to enroll are also those likelier to need treatment.

So what difference did the study show in health outcomes between Medicaid patients and the uninsured? Almost none at all. Specifically, they found no statistically significant reductions in hypertension, high blood sugar, high cholesterol, or broad markers of cardiovascular health. And this was despite the likelihood that the Medicaid enrollees were sicker to start with and the fact that, as Avik Roy points out, Oregon’s Medicaid program pays doctors better than most states do, thus increasing access to care (21 percent of Oregon doctors won’t take new Medicaid patients, compared with 31 percent nationwide).

What the Study Does Show
So does the study show any benefit to Medicaid? Sure, it shows an increase in health-care spending and treatment consumption, an improvement in subjective reports of mental well-being, and “reduced financial strain.” In other words, the only statistically significant results of the study show that 1) subsidizing something causes people to spend less of their own money on it, and to use more of it, and 2) that this makes them marginally happier. But since none of these measures seem to actually make people healthier, it might be better to just cut checks for them or put Prozac in the water.

How the Left Is Spinning It
The current study is actually a two-year follow-up to a 2011 study that showed more or less the same thing: greater feelings of well-being and reduced financial strain, but little in the way of tangible health benefits. When the original study came out, left-leaning health wonk Ezra Klein called it “the most important health-care policy experiment since the 1970s” and “the gold standard in research.” He titled his post on the subject “Amazing Fact! Science Proves Health Insurance Works.” Klein and others anxiously awaited the new data, which many sincerely expected would confirm the effectiveness of Medicaid and, by extension, Obamacare. So what are they saying now? Klein’s Wonkblogger Sarah Kliff admitted the basic result but threw in a sly adverb to suggest the study showed only that Medicaid doesn’t improve outcomes “quickly.”

Others on the left spun like whirling dervishes. Mother Jones’s Kevin Drum wrote that “the study showed fairly substantial improvements” (emphasis his) but that “the problem is that the sample size of the study was fairly small, so the results weren’t statistically significant.” Au contraire: The sample size is impressively large for a randomized social-scientific study like this — which is why the Left used to love it — but never mind that. Drum is basically saying that the study shows improved outcomes if you throw out widely accepted statistical methodology.

Other lib spinners moved the goalposts. Paul Krugman, for instance, wrote that “until now the claim of right-wingers has been that Medicaid makes you sicker.” He concluded: “Above all, you should bear in mind that if health insurance is a good idea . . . Medicaid is cheaper than private insurance. So where is the downside?” Well, cheaper for some, anyway, though we might ask whether “it won’t make people sicker” is a robust enough justification for a program that will cost the federal government, and especially the states, more than $7 trillion over the next ten years.

Jonathan Gruber’s response was perhaps most striking of all, since he is an architect of Obamacare, co-author of the study, and a kind of Obi-Wan Kenobe for lefty health wonks. “The most important thing the Affordable Care Act will accomplish,” Gruber said, “is end the daily stress and uncertainty that face individuals who are uninsured.”

Let that sink in for a moment.

What All This Means for Obamacare
So there is no evidence as of yet that Medicaid controls health-care costs. Just the opposite, in fact: It encourages greater consumption of health-care services. And there is no evidence that it significantly improves (physical) health outcomes. (In this finding, it comports with many other studies.) So what does this mean for the rest of Obamacare?

Well, remember, if all the states had implemented the Medicaid expansion, half of the coverage expansion promised under the Affordable Care Act would have been accomplished through it, and much of that in states with Medicaid programs stingier than Oregon’s. In other words, they are going to be brought into a program, at great cost, that has shown no sign of improving people’s health, even at its most generous. And since these incoming Medicaid patients are by definition poorer and tend to be sicker than average, they represent a modest baseline against which to measure any improvement. The framework of mandates, price controls, and subsidies meant to cover everyone else under Obamacare is likely to be even less effective at improving outcomes, since by definition it will cover a group that is already relatively better off, financially and health-wise.

But all of this is okay, we are told, as long as you feel healthier. So go ahead and think about a trillion in new spending, wall-to-wall premium hikes, individual mandates, abortion mandates, the regulatory vise on small business, and the “train wreck” (as Max Baucus describes it) that is implementation, and tell me: How do you feel?

Daniel Foster is NRO’s news editor.



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