New study casts doubt on proposed Medicaid expansions
A new study casts doubt on the wisdom of several proposed Medicaid expansions. According to a study released in January 1999 by the National Bureau of Economic Research, Medicaid may not improve the health of poor children.
"The results of this paper provide at best weak support for the hypothesis that Medicaid improves the health of low-income children," the study concluded.
Medicaid is a program that uses both state and federal money to provide health insurance for the poor. Ohio spent $5.1 billion on Medicaid in fiscal year 1998.
"The proposition that health insurance is the cure for adverse health outcomes among poor and near-poor children has not been adequately demonstrated," the study concluded.
Expanding Medicaid
An Ohio health coalition of local business associations, legal aid societies, and charities has urged Governor Bob Taft to expand Medicaid eligibility to include more adults. In his recent State of the State address, Governor Taft proposed expanding Medicaid to children in families earning 200 percent of the poverty level.
Because of increased federal funding, many states have proposed Medicaid expansions. "The federal government has recently allocated $24.3 billion for the expansion of publicly provided health insurance, ostensibly to improve the health of low-income children. It is remarkable that there is so little empirical evidence to support such a large expenditure," the study concluded.
The federal government funds originated with the Balanced Budget Act of 1997, which contained the Children’s Health Insurance Program (CHIP). CHIP has led many states to expand Medicaid eligibility.
Mandates and the uninsured
Medicaid expansions are often promoted as a way to help those who lack health insurance. However, extensive research published in 1998 shows that state health care mandates cause between one-fifth and one-quarter of all uninsured. Ohio currently has over 20 health care mandates and 1.28 million uninsured.
Notes
[1] Robert Kaestner, Theodore Joyce, and Andrew Racine, "Does Publicly Provided Health Insurance Improve the Health of Low-Income Children in the United States?" NBER Working Paper 6887 (Cambridge, Mass.: National Bureau of Economic Research, January 1999).
[2] Kaestner, et al., p. 21.
[3] Legislative Budget Office, Budget Footnotes, July/August 1998, p. 254. Ohio spent $5,056,299,000 on Medicaid during fiscal year 1998 (July 1, 1997 to June 30, 1998).
[4] Kaestner, et al., p. 21. The NBER study shows that there is little evidence that better access improves health. Its findings confirm those of a 1993 study by the RAND Health Insurance Experiment. J. P. Newhouse, Free for All: Lessons from the RAND Health Insurance Experiment (Cambridge, Mass.: Harvard University Press, 1993). Previous studies have simply shown that health care utilization – "better access" – increases with insurance coverage. These studies then assume that better access improves health. See, for instance, P.W. Newacheck, et al., "Health Insurance and Access to Primary Care for Children," The New England Journal of Medicine, Vol. 338, No. 8 (1998), pp. 513-519; S. Long and S. Marquis, "Reconsidering the Effect," Health Services Research, Vol. 30 (1996), pp. 791-808; J. Currie and D. Thomas, "Medical Care for Children: Public Insurance, Private Insurance, and Racial Differences in Utilization," Journal of Human Resources, Vol. 30 (1995), pp .135-162; and R. F. St. Peter, et al., "Access to Care for Poor Children," Journal of the American Medical Association, Vol. 267 (1992), pp. 2760-2764.
[5] Mark Curnutte, "Medicaid expansion supported," Cincinnati Enquirer, January 24, 1999, pp. C1, C7. The coalition’s proposal would cost an estimated $107.2 million (70,000 adults x $1,532), while the Governor’s proposal would cost an estimated $37.0 million (27,000 children x $1,359). See Governor’s State of State Address, March 9, 1999, and Office of the Governor, "Medicaid Fact Sheet," March 20, 1998. (See graph on opposite page.)
[6] Kaestner, et al., p. 22.
[7] Title XXI (the Child Health Insurance Program) of the Balanced Budget Act of 1997 (Public Law 105-33) was signed into law by President Bill Clinton in August 1997.
[8] Frank A. Sloan and Christopher J. Conover, "Effects of State Reforms on Health Insurance Coverage of Adults," Inquiry, Vol. 35 (1998), pp. 280-293.
[9] Health care mandates appear in Sections 3901, 3902, 3923, 3999, and 4112 of the Ohio Revised Code. Uninsured number from William S. Custer, Health Insurance Coverage and the Uninsured (Atlanta: Center for Risk Management and Insurance Research, Georgia State University, December 10, 1998), Table 2, p. 9. See also "Health care mandates increase number of uninsured," Policy Note (Dayton, Ohio: The Buckeye Institute for Public Policy Solutions, January 1999). Retrievable from http://http://www.buckeyesintitute.org
