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Medicaid at 50: Evidence Shows Medicaid Benefits Enrollees, Contrary to Claims

Medicaid critics and some media reports have repeated claims that Medicaid coverage is harmful and beneficiaries would be better off being uninsured.  They base them on a misunderstanding or misleading use of research that finds poor health outcomes among Medicaid enrollees.  But studies that are designed to specifically evaluate Medicaid’s causal effects overwhelmingly find that the program produces health and financial benefits for participants.

The studies that critics cite weren’t designed to test the causal relationship between Medicaid and health outcomes.  A New England Journal of Medicine (NEJM) article from leading health economists summarizes these studies’ serious limitations.  The studies:

  1. Lack a convincing causal pathway from Medicaid coverage to poorer health outcomes.  The studies don’t identify valid reasons why having Medicaid would be worse than being uninsured.
  2. Fail to control for the variables that differentiate Medicaid beneficiaries from the uninsured.  None of the studies in question are randomized experiments, so analysts must control for the variables that make Medicaid beneficiaries different from the uninsured in order to determine Medicaid’s effects.  As the NEJM article notes, they tend to be sicker than the uninsured and have a “lower socioeconomic status,” worse nutrition, and fewer community and family resources.  But these studies don’t (and can’t) control for all of the demographic characteristics that would affect health outcomes.  Thus, the poorer health outcomes among Medicaid beneficiaries that the studies found are likely due to these uncontrolled differences between Medicaid beneficiaries and the uninsured.
  3. Are vulnerable to cherry-picking the results.  Although the studies’ authors may describe varying results based on several statistical models, they generally prefer one as the most methodologically sound.  For example, in the 2003 study on care for HIV patients, the authors explain that their preferred model finds that Medicaid beneficiaries with HIV have much better outcomes than the uninsured with HIV.  Some Medicaid critics, however, cite the study’s less-sound model that shows a much smaller difference to bolster their claims. 

In contrast, a wide body of research has specifically tested Medicaid’s effects on beneficiaries’ health and financial well-being.  These studies take advantage of the variation in state Medicaid eligibility levels to deliberately test causation between Medicaid and health outcomes.  They consistently find that Medicaid results in better health outcomes than the uninsured have, as health economist Austin Frakt points out in NEJM

Most recently, research in Oregon on Medicaid coverage for a limited group of adults has allowed for the gold standard of a randomized control study experiment.  The state used a lottery to decide which low-income uninsured adults on a waiting list for Medicaid could apply for coverage.  The lottery thus allowed researchers to compare two groups of people who differed in only one major way: one group got Medicaid coverage and the other did not.  That research has found that Medicaid, as expected, substantially improves patients’ health and provides financial protection against unaffordable out-of-pocket costs.

As Medicaid turns 50, learn more about how it improves access to health care, its long-term benefits, and why states should expand Medicaid: