Medicaid

 VI. Key Issues: Financing and Delivery >> D.  Health Insurance Coverage >> Public Health Insurance >> Medicaid (last updated 12.1.17)

Key Questions

What is the Impact of Medicaid on Health Outcomes?

• Baicker, K., Taubman, S. L., Allen, H. L., Bernstein, M., Gruber, J. H., Newhouse, J. P., . . . Finkelstein, A. N. (2013). The Oregon Experiment — Effects of Medicaid on Clinical Outcomes. New England Journal of Medicine, 368(18), 1713-1722. doi: doi:10.1056/NEJMsa1212321. This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.
  
  • Shikha Dalmia. How the Liberal Press is Spinning the Oregon Medicaid Study (5.2.2013)

  • Peter Suderman. More Bad News for Obamacare: Study Finds Medicaid Has No Effect on Measured Health Outcomes (5.1.2013

    ).

  • Avik Roy. Oregon Study: Medicaid ‘Had No Significant Effect’ On Health Outcomes vs. Being Uninsured (5.2.2013).
• Lurie Nicole, N.B. Ward, Martin F. Shapiro, C Gallego, R Vaghaiwalla, Robert H. Brook. Termination of Medi-Cal Benefits: A Follow-Up Study One Year Later. New England Journal of Medicine, v. 314, No. 19, 1986, p. 1266-1268.
• Lurie N, N.B. Ward, Martin F. Shapiro, Robert H. Brook. Termination from Medi-Cal — does it affect health? New England Journal of Medicine, 1984;311: 480-4.

What is the Impact of Medicaid on Non-health Outcomes?

• Brown, David W., Amanda E. Kowalski, Ithai Z. Lurie. Medicaid as an Investment in Children: What is the Long-Term Impact on Tax Receipts? NBER Working Paper No. 20835. Issued in January 2015. The government will recoup 56 cents of each dollar spent on childhood Medicaid by the time these children reach age 60. This return on investment does not take into account other benefits that accrue directly to the children, including estimated decreases in mortality and increases in college attendance. Moreover, using the MSIS data, we find that each additional year of Medicaid eligibility from birth to age 18 results in approximately 0.58 additional years of Medicaid receipt. Therefore, if we scale our results by the ratio of beneficiaries to eligibles, then all of our results are almost twice as large.
• Cohodes, Sarah, Samuel Kleiner, Michael F. Lovenheim, Daniel Grossman. The Effect of Child Health Insurance Access on Schooling: Evidence from Public Insurance Expansions. NBER Working Paper No. 20178, Issued in May 2014. A 10 percentage point increase in childhood Medicaid eligibility reduced the rate of high school dropouts by 5 percent and increased completion of a bachelor’s degree by 3.3 to 3.7 percent.
  

How Much Does Medicaid Crowd Out Private Coverage?

• Cutler, D.M. and J. Gruber, Does Public Insurance Crowd Out Private Insurance? The Quarterly Journal of Economics 111, no. 2 (1996):391–430. Estimates that every extra $1 spent on Medicaid reduces private health insurance by 50-75¢.

• Duchovny, N. and L. Nelson. The State Children’s Health Insurance Program, CBO Pub no. 2970 (Washington,DC: Congressional Budget Office, 2007). This report projects a crowd-out rate of 25% to 50% for SCHIP.

• Gruber, J. and K. Simon, Crowd-Out Ten Years Later: Have Recent 

  Public Insurance Expansions Crowded Out Private Heath Insurance? Working Paper no. 12858 (Cambridge: National Bureau of Economic Research, 2007). E

  stimates SCHIP crowd-out at 60%.

Is Medicaid a “Welfare Magnet”?

• Schwartz, Aaron L., and Benjamin D. Sommers. Moving for Medicaid? Recent Eligibility Expansions Did Not Induce Migration from Other States. Health Affairs 33, no. 1 (January 1, 2014 2014): 88-94. We used data from the Current Population Survey to examine the migration patterns of low-income people before and after recent expansions of public insurance in Arizona, Maine, Massachusetts, and New York. Using difference-in-differences analysis of migration in expansion and control states, we found no evidence of significant migration effects. Our preferred estimate was precise enough to rule out net migration effects of larger than 1,600 people per year in an expansion state. These results suggest that migration will not be a common way for people to obtain Medicaid coverage under the current expansion and that interstate migration is not likely to be a significant source of costs for states choosing to expand their programs.

Medicaid Financing

Medicaid Provider Taxes

• Congressional Research Service. Medicaid Provider Taxes. August 5, 2016.
• Medicaid and CHIP Payment and Access Commission (MACPAC). Health Care Related Taxes in Medicaid. August 2012.
• Brian C. Blase. Medicaid Provider Taxes: The Gimmick That Exposes Flaws with Medicaid’s Financing. Mercatus Center, February 2016.
• GAO. Statement of Kathryn G. Allen, United States General Accounting Office, Medicaid: Intergovernmental Transfers Have Facilitated State Financing Schemes. Testimony Before the Subcommittee on Health, House Committee on Energy and Commerce, March 18, 2004.
• National Conference of State Legislatures. Health Provider and Industry State Taxes and Fees. January 3, 2017.

Analysis