What Happens When 34 Million More Join Medicaid Ranks in 2014?

It’s harder to figure out how to save money than it is to create programs and spend money. Politically, the idea of a free lunch has enormous appeal.

Former Republican Senator, John Danforth ,in Kaiser Health News Interview, August 23, 2011

August 24, 2011 - What will happen in 2014 when Medicare begins covering 34 million uninsured, and probably millions more as employers drop coverage?

Will costs go up? Will states be able to absorb new financial burdens? Will there be enough doctors to care for them? Will emergency room loads go up or down? Will hospitals prosper or fail? Will the health of the newly insured improve?

These are unanswered and unanswerable questions at present, but an article in the August 25 New England Journal of Medicine ("The Effects of Medicaid Coverage-Learning form the Oregon Experiment"), based on a double blind study of 10,000 Oregonians, gives important clues. The article, by two PhDs at Harvard and MIT, gives yields these probabilities of enhanced Medicaid coverage.

Probabilities

• Use of outpatient care, up 35%

• Use of prescription drugs, up 15%

• Hospital admissions up 30%

• Total health expenditures, up 25%

• Chances people borrowing money, or skipping payments to pay health bills, down 40%

• Chances bills will be sent to collection agency, down 25%

• Odds Medicaid enrollees will report they in good or excellent health, up 25%

• Likelihood of screening positive for depression, down 25%

• Likelihood of reporting they are “happy” or “very happy,”up 30%

• Objective evidence of physical health improvement, no data available.

In summary, health costs and health care use will go up, Medicaid recipients will be less depressed, the happy days of a free lunch will arrive, and the sad days of government overspending will continue.

Tweet: From Oregon double blind study of Medicaid coverage of uninsured comes evidence costs and happiness will go up along with deficits.