Medicaid Expansion in Oregon

In early 2008, Oregon expanded it’s Medicaid eligibility.  To take advantage of these new benefits, 85,000 individuals signed up.  Oregon’s budget, however, only had enough money to fund Medicaid coverage for 30,000.  In a researcher’s dream case, Oregon decided to select the 30,000 eligible to apply for coverage using random assignment.  Because this policy in essence created a randomized control trial, researchers can use these data to make a number of policy inferences.  A recent paper by Allen, Baicker, Finkelstein, Taubman and Wright (2010) does just that.

The paper uses preliminary data to draw the following conclusions:

  • Even for those eligible for Medicaid, there are significant barriers to take-up.  Some past studies have found that take-up among newly eligible pregnant women and children is under 35 percent.  In the case of Oregon, of those people included from the list, only 61% actually applied for Medicaid benefits and only half of those who applied were accepted.  Thus the total acceptance rate was only 30%.
  • Moral Hazard.  Those who applied for Medicaid were greater users of medical services than those that did not.  For instance, they were 3 years older on average and more likely to be in poor health.

In the future, the data from the Oregon Health Study Group can shed light on whether Medicaid in fact does improve health outcomes and if so through which mechamisms.

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