One of the often touted benefits of Obamacare is the premise that putting uninsured Americans on Medicaid (MediCal in California) would reduce costly emergency department visits by giving these individuals increased access to other healthcare services such as clinics and medical groups that deliver healthcare at a lower cost. A new study, published online on January 2 in the journal Science, has found that expanding Medicaid increased utilization of emergency department use rather than lowering it.
The basic concept of emergency department care is to handle emergency situations such as heart attacks, trauma, and other serious conditions that occur suddenly. However, many individuals present at the emergency department for minor non-emergent conditions. Emergency department care is expensive—significantly more than other healthcare settings; thus, it drives up healthcare costs. In 2008, Oregon introduced a limited expansion of a Medicaid program for uninsured, low-income adults; names were drawn from a waiting list by lottery. The study authors note that this lottery generated a rare opportunity to assess the effects of Medicaid coverage with a randomized, controlled study (the fact that the lottery recipients were randomly drawn provided randomization). The lottery recipients totaled 25,000 individuals; their use of emergency departments was tracked for a period of 18 months after they were included in the lottery.
The investigators found that Medicaid coverage significantly increases overall emergency department use. On the average, the Medicaid recipients visited presented at emergency departments in 12 Portland-area hospitals 1.4 times during an 18-month period, compared with 1.02 visits for the control group without insurance. Using $435 as the average cost of an emergency department visit, the investigators calculated that Medicaid increased annual emergency department spending by $120 a covered person.
Medicaid expansion is a component of the 2010 healthcare law that was ruled optional by the US Supreme Court. To date, 25 states and the District of Columbia have accepted the Obama administration's offer to finance extending the Medicaid program to anyone earning less than 138% of the federal poverty level through 2016, and to finance 90% of the costs thereafter. Well before the Supreme Court’s decision, California already had begun moving to expand Medi-Cal coverage for low income residents. The state also was the first to begin setting up an exchange through which others could obtain health insurance; these implementations were all in preparation of reforms that were enacted on January 1, 2014 under the federal Patient Protection and Affordable Care Act.
The study authors are affiliated with the National Bureau of Economic Research (Cambridge, Massachusetts), Columbia University School of Social Work (New York, New York), Center for Outcomes Research and Education, Providence Portland Medical Center (Portland, Oregon), Department of Health Policy and Management, Harvard School of Public Health, Boston, Massachusetts), and Department of Economics, Massachusetts Institute of Technology (Cambridge, Massachusetts).