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Oregon Study No Reason to Change Course on Medicaid Expansion

Recently, as part of a larger study that examined the impact of Oregon’s 2008 Medicaid expansion, researchers compared the people in that state who gained public health coverage with the people who remained uninsured — and found that the first group made 40 percent more trips to emergency departments.

Affordable Care Act (ACA) critics have immediately seized on this as an iron-clad excuse for not moving forward with the Medicaid expansion option.  The findings of this study actually underscore the need for expanding access to affordable health insurance coverage.

First things first – the results of this study are unsurprising.  When previously uninsured people get covered, their utilization goes up.  This is true for the privately insured as well as the publicly insured.  (Read the Center for Studying Health System Change research brief, published December 2013.) It isn’t just that people with Medicaid use more resources once they become insured, it’s that all people get checked out when they obtain health insurance, whether it is publicly or privately financed.  There is pent-up need – or, in other words, a tremendous amount of demand – in our health care system.

In fact, this is such expected behavior that the Medicaid expansion that is included in the ACA is designed to accommodate it. For the first three years of the Medicaid expansion, federal financing pays 100 percent of the cost. In other words, the ACA deliberately puts all of the financial exposure for initial increased utilization, expected in the first few years of new coverage, solely on the federal dime.

Moreover, increased utilization is temporary. The increase in utilization will subside as people have their previously unmet health care needs addressed, as people formerly outside the health care system learn where and how to appropriately access primary care, and as people and the health care delivery system in general become accustomed to a broader distribution of health insurance coverage in our communities.  This was certainly borne out in Massachusetts, where after an initial increase in utilization following universal coverage, emergency room (ER) utilization declined, mostly attributable to fewer people seeking non-emergent care in the ER.  (Read the Massachusetts ER study here.)   The Oregon study lasted only 18 months, so it is too short to show any subsequent plateau or decline.

Significantly expanding access to affordable health insurance to low-income people in the Granite State will not instantaneously reform the health care delivery system.  People won’t immediately know when and where to get primary care simply because they have an insurance card.  Habits and comfort zones take time to change for patients and providers.  New Hampshire is just now initiating a managed care system into its Medicaid program.  If the program is successful, it should be able to effectively connect enrollees to primary care settings and teach them how and when to use them.

This leads to the final point:  reforming how health insurance is provided – which is the overarching goal of the ACA – is not the same as reforming the overall health care delivery system.  If we want people to use the system in a more efficient and cost-effective way, we must reform how health care is delivered.  However, New Hampshire must tackle the threshold issue of moving most of the participants in our health care system into coverage before it can begin long-term reform of the system and enjoy the benefits of smarter, more efficient use of it.


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House Finance Committee Budget Boosts Education and Health Funding

5 Apr 2019

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The House Finance Committee passed its version of the State Budget on Wednesday, April 3, recommending the full House adopt a plan to send significantly more money to local governments for education aid and add funding for State health services. The plan would fund these increases by using the current State surplus revenue in the State operating budget and expanding existing revenue sources while retaining added revenues proposed by the Governor. The Committee removed many of the Governor’s recommendations for one-time uses of surplus dollars and deployed most of those funds for budgeted services throughout the biennium. The House is scheduled to vote on the House Finance Committee’s amendment to the budget on April 11.