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Why Does Obamacare Double Down on Medicaid?

In many cases having government health insurance is no better than having no insurance

12:45 PM, Jul 7, 2011 • By MARK HEMINGWAY
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One of biggest impacts of Obamacare is the law's expansion of Medicaid. A program designed to help the poor will now balloon to cover as many as 84 million Americans.

However, the Medicaid program is a disaster and why the Obama administration would double down on an increasingly expensive program that is failing to provide basic medical care remains an open question. A recent National Bureau of Economic Research study on Medicaid suggests that in many ways having Medicaid is no different than having no insurance at all. The Republican Policy Committee summarized the findings:

·         The study was funded by both the Administration – specifically HHS’ Office of Planning and Evaluation and CMS – and liberal think-tanks like the Robert Wood Johnson Foundation, all of which have interests in promoting the benefits of Obamacare’s Medicaid expansion.

·         The study notes “there is no discernible impact of insurance on emergency room or inpatient hospital use” from new Medicaid coverage.  If accurate, this finding would undermine one of the arguments for Obamacare – that expanding coverage through Medicaid will reduce unnecessary emergency room visits.

·         The authors note that “we do not believe our…estimates are capturing an initial, highly transitory surge of ‘pent up demand’ for health care among the uninsured.”  This is a somewhat surprising development, which raises questions why the uninsured did not feel the need to obtain health services immediately upon enrolling in Medicaid.

·         While the authors found a decrease in financial pressures among new Medicaid beneficiaries, they did not find a statistically significant reduction in the most extreme examples of financial strain (e.g., bankruptcies, liens, etc.).  While this development could be based on a “pipeline” effect (bankruptcies can take years to develop, and the study examined only one year of available data), the authors note their conclusion contrasts with the findings of another study released this year.

·         The study notes that “we do not detect any statistically significant improvement in survival probability” from obtaining Medicaid coverage.  This development could be due to the relatively young and healthy nature of the expansion population, but it still suggests that, when it comes to the ultimate arbiter of health, Medicaid’s impact is far from definitively proven.

·         Although the authors note an increase in self-reported health status for the new Medicaid beneficiaries, they repeatedly note that the “measures could reflect a more general sense of well-being rather than actual improvements in objective health.”

Call me crazy, but the purpose of medical insurance should be the ability to receive actual medical care, not just a "general sense of well-being." In terms of actual health outcomes, Scott Gottlieb M.D. noted in the Wall Street Journal back in March that there was often no discernible between those that had Medicaid and those that had no health insurance when it came to having major health problems:

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