Oregon’s Early Experience With Insuring the Uninsured

A report published by the National Bureau of Economic Research examines first-year experience under Oregon’s initiative to provide some uninsured residents with Medicaid coverage.   (Oregon Report)   The background is that in 2008 Oregon allowed 10,000 uninsured residents to gain Medicaid coverage through a lottery which essentially randomized those who got coverage.  The study compared these persons with those who did not get coverage.  The authors looked not only at health care utilization and spending, but also effect on debt and financial status and surveyed for self-reported outcomes.  As would be expected, those who got insurance had higher utilization and spending than those who didn’t, with a 2% greater likelihood of a hospital admission, mostly elective ones, about a 15% greater use of prescription drugs and a 55% increase in outpatient visits.

The authors did not believe this first year of coverage utilization reflected “pent-up” demand, but rather would be an ongoing utilization more reflective of having insurance.  Having coverage meant a much greater likelihood of receiving a number of preventive services, which likely improves quality of care.  It also led to less financial strain, with fewer debt collections and less out-of-pocket spending.  It should be noted that Medicaid coverage is particularly generous, with almost no enrollee financial responsibility.  Accessing more typical commercial coverage would not provide the same financial relief, nor would there likely be the same acceleration in utilization.  (As a side note, how “fair” is it to provide such gold-plated coverage to Medicaid recipients when the taxpaying public who pay  for it generally have much worse plans?)  While coverage did not improve mortality rates, it was associated with much better self-reported health status and with overall happiness.  This study is early and says nothing about the long-term cost effect of having continuous health insurance.  Having health coverage is undoubtedly a good thing; equally important is how and by who it gets paid for and in particular, ensuring that individuals have adequate incentive to be prudent consumers and to stay in good health.