Does having health insurance make you happier and healthier?

Does providing health insurance to the poor actually make them healthier? While a critical question in the long-running health care debate, the impact of health insurance on the poor has been difficult to determine as studies comparing the insured versus the uninsured typically have too many variables (income, education, health habits, etc.) to be completely successful. However, a recent study on the impact of Medicaid in Oregon provides the first rigorously controlled look at the costs and benefits of having health insurance.

This study, published by the National Bureau of Economic Research, took advantage of an unusual situation in Oregon, which decided to expand its Medicaid program by selecting 10,000 uninsured people by lottery. This allowed economists to compare those selected by lottery to receive Medicaid with those who had not been picked. Because it is considered unethical for researchers to deny coverage to some people for the benefit of a study, nothing like this had ever been done before.

In short, the findings from the first year are encouraging. The researchers found that when the previously uninsured were given Medicaid they saw doctors more often, felt more financially stable, reported better physical and mental health, and undertook more preventative health measures. For example, Medicaid coverage increased the likelihood of using outpatient care by 35% and of having a regular doctor by 55%. Women on Medicaid were 60% more likely to receive a mammogram than the uninsured group and the likelihood of people having to borrow money or skip other bills to pay for health care decreased by 40%. However, having Medicaid coverage did not reduce the number of emergency room visits and increased utilization of health care services by the insured added up to an extra 25% in annual medical expenditures, making cost still a significant factor.

With the debate on the expansion of public insurance raging, this study is expected to be a strong argument for insuring the poor. However, feeling healthier doesn’t necessarily mean that people are healthier. The study also didn’t assess the quality of care for those on Medicaid, which is a frequent criticism of public insurance. The second phase of the study will attempt to answer at least one of these questions by measuring the health effects of having Medicaid versus being uninsured. The researchers interviewed 12,000 people (6,000 from each category) and measured variables like blood pressure, cholesterol, and weight. Those results will be released once they have been analyzed.

Insuring the poor is a critical component to reducing the chronic disease burden and eliminating health disparity. Relying on “safety net” hospitals, free clinics, and charity care is not a sustainable option, nor a preferable one. However, expanding public insurance on its own is not enough. Without improving the quality of care of those on Medicaid or raising reimbursement rates so that more doctors accept it, the cycle of poor health outcomes for underserved populations will continue. As this study shows, if people are offered the option to live a healthier life they take it. This should be proof enough.

To read the entire study, click here.