Two Years after Medicaid Expansion, Oregon Experiment Shows No Measurable Gains in Physical Health but Substantial Improvements in Finances, Mental Health

May 1, 2013 @ 3:02 pm

heidi-allen-webAssistant Professor Heidi Allen is an investigator in a ground-breaking study of the Oregon Health Insurance Experiment

New findings from the Oregon Health Insurance Experiment show that Medicaid coverage had no detectable effect on the prevalence of diabetes, high cholesterol, or high blood pressure, but that it substantially reduced depression, nearly eliminated catastrophic out-of-pocket expenditures, and increased the diagnosis of diabetes and the use of diabetes medication among low-income adults.

Heidi Allen, an assistant professor at Columbia University School of Social Work, led the on-site data collection for the study along with Bill Wright, an associate director at the Providence Center for Outcomes Research & Education.

The Oregon Experiment presents the first use of a randomized controlled design to evaluate the impact of covering the uninsured with Medicaid. Presented with colleagues from Harvard School of Public Health, MIT, and the National Bureau of Economic Research, including principal investigators Katherine Baicker and Amy Finkelstein, the study’s latest findings appear in the May 2 issue of the New England Journal of Medicine* and provide important evidence for policy makers as the U.S. undertakes Medicaid expansion in 2014.

“Evaluating the health impacts of expanding Medicaid has always been complicated; characteristics associated with eligibility for Medicaid, which include low-income and poor health, will naturally confound the outcomes,” Allen said. “The randomized nature of this study makes it stand out, and offers the best evidence to date on the issue.”

In 2008, Oregon held a lottery to give additional low-income, uninsured residents access to its Medicaid program; about 90,000 individuals signed up for the lottery for the 10,000 available openings. Approximately two years after the lottery, the researchers conducted more than 12,000 in-person interviews and health examinations of lottery participants in the Portland, Oregon metropolitan area, and compared outcomes between those randomly selected in the lottery and those not selected in order to determine the impact of Medicaid.

“Medicaid performed very well on protecting low-income adults from catastrophic medical debt, reducing their financial strain, and increasing their access to care.  It also led to substantial improvements in mental health,” Allen explained, while also noting that that team “did not find that coverage led to detectable improvements in our physical health measurements in the first two years.”

Specific findings include:

Physical health

  • Medicaid had no significant effect on measures of hypertension or high cholesterol, or on the rates of diagnosis or use of medication for these conditions.
  • Medicaid increased the probability of being diagnosed with diabetes after the lottery by 3.8 percentage points (compared to the 1.1% of the control group who were diagnosed with diabetes) and increased the use of diabetes medication by 5.4 percentage points (compared to the 6.4% of the control group who used diabetes medication), but had no effect on glycated hemoglobin (a measure of diabetic blood sugar control).

Mental health
Medicaid reduced rates of depression by 9 percentage points (compared to the 30% of the control group screening positive for depression) and increased self-reported mental health.

Financial hardship
Medicaid virtually eliminated out-of-pocket catastrophic medical expenditures (defined as out-of-pocket medical expenditures in excess of 30% of household income) and reduced other measures of financial strain.

Utilization and access
Medicaid increased health care use, including the use of physician services, prescription drugs, and preventive care.

* * *

The current study is part of an ongoing research program gathering a wide array of data sources to examine many different effects of Medicaid, and represents a collaboration between nonprofit and academic researchers and state policy makers. A previous study looking at data collected about a year after the lottery found that Medicaid substantially increased health care use, increased self-reported health, and reduced financial strain. More information can be found at

Support for the study was provided by:

* “The Oregon Experiment—Effects of Medicaid on Clinical Outcomes,” Katherine Baicker, Sarah L. Taubman, Heidi L. Allen, Mira Bernstein, Jonathan H. Gruber, Joseph P. Newhouse, Eric C. Schneider, Bill J. Wright, Alan M. Zaslavsky, Amy N. Finkelstein, NEJM, May 2, 2013, 368;18

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