Freedom Line Blog

A new study by a top flight team of academic researchers destroys the Obama administration’s premise for expanding Medicaid coverage.

The report, authored by researchers at MIT, Harvard and Columbia, focuses on an Oregon experiment to expand Medicaid that predates Obamacare by about five years. The findings show that giving Medicaid to an uninsured person increases the recipient’s visits to the emergency room up to 40 percent. This “runs counter to government assumptions that the newly insured would choose lower-cost options for care, such as doctors’ offices,” says Businessweek.

Avik Roy speculates that one of the reasons for why Medicaid enrollment increases unnecessary ER visits is that many doctors are refusing to accept new Medicaid patients because the federal government pays less than private insurance for the same service. Difficulty in obtaining primary care results in using the ER as the provider of first resort.

If the Oregon study is an accurate predictor of Medicaid patient behavior under Obamacare – and there is every reason to believe it is – then federal spending is about to soar.

With Obamacare’s Medicaid expansion already enrolling 3.9 million new people, the higher costs associated with emergency room visits could balloon actual spending far above the Obama administration’s current projections.

To make matters worse, previous research from Oregon shows that moving from no insurance to Medicaid does not improve health outcomes. Instead, it shifts the cost of care from the beneficiary to the taxpayer (and the provider who either eats the diminished compensation or passes it on to other patients).

So, to recap, Obamacare’s Medicaid expansion looks very likely to increase costs while having zero impact on the health of the beneficiaries.

Let this be a confirmation that the decision by governors who chose not to expand Medicaid under Obamacare was the sensible, scientifically proven way to go.