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Medicaid at 50: Expanding Access and Supporting Work

As the economy continues recovering from the recession, it’s important to recognize how Medicaid improves families’ health and individuals’ work prospects.  These points from our recent paper rebut two charges that critics sometimes make about the program.

1.  Medicaid coverage improves people’s health.  Contrary to the highly implausible charge that Medicaid is worse than no coverage at all, Medicaid has helped make millions of Americans healthier by improving access to preventive and primary care and by protecting against (and providing care for) serious diseases.

Notably, a landmark study of Oregon’s Medicaid program found that Medicaid beneficiaries were 40 percent less likely to have suffered a decline in their health in the last six months than similar people without coverage.  They were also likelier to use preventive care (such as cholesterol screenings), to have a regular clinic where they could receive primary care, and to receive a diagnosis of and treatment for depression and diabetes.

Medicaid beneficiaries also were 40 percent less likely than those without insurance to go into debt or leave other bills unpaid in order to cover medical expenses.  In fact, the latest research from Oregon found that Medicaid coverage “nearly eliminated catastrophic out-of-pocket medical expenditures.”

Obtaining access to health care through Medicaid offers long-term benefits as well, research shows.  African Americans eligible for Medicaid for more of their childhood had fewer hospitalizations and ER visits as adults, one study found. Other studies have found that children eligible for Medicaid for more of their childhood earn more as adults and are likelier to attend and complete college.

2.  Health reform’s Medicaid expansion significantly cuts work disincentives among working-poor parents.  Charges that health reform creates a “poverty trap” that discourages poor families from working more don’t match reality.  In states that have adopted health reform’s Medicaid expansion, poor parents can earn substantially more and still retain Medicaid.

Before the expansion took effect in 2014, Medicaid eligibility for working parents cut off at just 61 percent of the poverty line in the typical state, or roughly $14,550 for a family of four. As a result, a poor parent would lose Medicaid if she worked more hours or took a higher-paying job.

Now, in the 28 states and the District of Columbia that have expanded Medicaid, the Medicaid eligibility limit for working parents is 138 percent of the poverty line, or about $33,465 for a family of four.  If a family’s income rises above $33,465, the working parent can get subsidized coverage through the health insurance marketplaces.

Thus, the Medicaid expansion enables tens of millions of working parents to seek higher wages or to work more hours without forgoing health coverage.  As the Congressional Budget Office says, “some people who would have been eligible for Medicaid under prior law — in particular, working parents with very low income — will work more as a result of the [health reform] provisions.”

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