Psychology and Policy in Play

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Insuring the Poor.

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As we try to straddle this recession, even though it is “over” and we are in “recovery,” federal funding for social programs is being slashed. This of course trickles down to state funded programs taking a hit. In particular, money allocated to states for Medicaid is not providing enough coverage, prompting some states, such as Maine, to move enrollees into managed care. Many question whether there would be any benefits for providing healthcare to the uninsured.

The National Bureau of Economic Research tackled this question and found that the poor and uninsured had better health outcomes and used more healthcare services than those who were not under Medicaid. In an unintended research design, the state of Oregon implemented a lottery system to select people at random to be enrolled in Medicaid, which comprised the treatment group). Those not selected compose the control group. The importance of the lottery lies in its ability to assign people randomly to a treatment or control group, which helps eliminate other factors that might influence the outcome of this study. Random assignment assumes that those receiving Medicaid (treatment group) and the uninsured (control group) share similar characteristics. Therefore, the results of the study can be linked to being insured, not the attributes of individual people in the treatment and control group. Furthermore, ethical violations would occur if the researchers randomly choose people to have insured while allowing others to go without it. Scientific research cannot prohibit people from getting available treatment, and in this case, it would be healthcare. Overall, the lottery provided the perfect opportunity since Oregon’s policy inadvertently allowed for random assignment.

At the outset of the study, people were in poor heath with 18% living with diabetes, 28% with asthma, 40% having high blood pressure, and 56% screening positive for depression. What emerged from this study was that having healthcare matters for low-income people. Sounds like a common sense conclusion, but many people think otherwise. People with Medicaid showed a 15% increase in their use of prescription medication and a 55% increase in outpatient visits. Even more, preventive measures increased among Medicaid users. Those with insurance had a 20% increase in blood cholesterol tests, 15% increase in being tested for diabetes or high blood sugar, 60% increase in women having a mammogram, and 45% change in women having a pap test. The insured also reported a 25% increase in describing their health as good or excellent and 40% less likely to say their heath increased within the last year.

Given the financial strain of health costs, researchers surveyed participants to determine if any changes were attributed to being insured. Researchers found significant declines in the financial burden related to medical expenses. People with insurance were 25% less likely to have unpaid debt for medical expenses and had a 20% decrease in the amount of medical debt they accrued. Other declines were seen in out of pocket expenses and in borrowing money or skipping other bill payments to pay medical costs.

Living without health insurance affects us all, and disproportionately affects the less educated, ethnic minorities, and the poor. The National Bureau of Economic Research study consisted primarily of White participants (4% were Black and 12% were Latino) with approximately 70% having either a high school diploma, GED, or only a high school education. These overall demographics create some limitations in generalizing these studies to groups disproportionally affected by major health problems and being insured. However, the findings give support to the idea of providing low-income people with free or low-cost  insurance as it encourages frequent use of health care resources, increases the use of preventive care, and reduces the financial burdens stemming from medical costs . No one should mistake this study as the end all, be all to the health care debate. Instead, it should serve as springboard for other states to try similar and innovative methods of providing insurance, especially to people hardest hit by not being insured. Furthermore, future studies should examine the role insurance plays in health care use for populations highly affected by major medical and mental illnesses, such as low-income African-Americans or first generation immigrants with language barriers.

* Read the complete study here: http://www.rwjf.org/files/research/72577.5294.oregon.nber.pdf

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Written by G

July 31, 2011 at 3:34 am

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