You Can Lead a Horse to Water…

Published May 7, 2013

I want to make just one observation based on Avik Roy’s outstanding write-up of the Oregon Medicaid project.

Most of the commentary has been shocked that there was no statistically significant improvement in health measures between people who were enrolled in Medicaid and those who were not.

I want to focus on a different issue, one that I have been hammering on in these pages ― that ObamaCare is unlikely to increase the number of people with insurance.

Before we even get to the outcomes question is the issue of whether very many people want to have insurance coverage, even when it is totally free.

Oregon had a limited amount of money with which to expand Medicaid, so it held a “lottery” for those who were potentially eligible. Roy writes −

Of the 35,169 Oregonians who “won” the lottery to gain enrollment in Medicaid, only about 30 percent actually enrolled. Indeed, only 60 percent of those who were selected bothered to fill out the forms necessary to sign up for the benefits — which tells you a bit about how uninsured Oregonians perceive the Medicaid program.

Yet the Oregon Medicaid program is far better than most –

In Oregon, Medicaid pays primary care physicians approximately 62 percent of what private insurers pay. That compares to the national average of 52 percent; a number of large blue states pay less than 40 percent. Because Oregon’s Medicaid program pays more, the state’s Medicaid beneficiaries have relatively better access to doctors. While 21 percent of Oregon physicians won’t take new Medicaid patients ― an unacceptably high number — the national average is even worse: 31 percent.

Importantly, Philip Klein reports that those who did enroll did not reduce their use of hospital emergency rooms –

Another interesting finding was that though medical spending increased among Medicaid enrollees due to more prescription drug usage and doctors’ visits, the study “did not find significant changes in visits to the emergency department or hospital admissions.” This undercuts another favorite talking point of liberals, which is that expanding insurance actually saves money by reducing costly emergency room visits.

So, first, people had to express some interest to be enrolled in the lottery. Then, if they made it through the lottery, they had to fill out enrollment forms. Then, they had to actually enroll. Yet only 30% of the lottery winners bothered to complete the process. And some of these numbers were undoubtedly people who had been getting coverage from their employers but decided that free coverage with no cost-sharing was a better deal than what they got on the job.

So, once again, even if ObamaCare is perfectly implemented on time and within budget, it is unlikely to have any positive effect on the numbers of uninsured ― the entire reason it was enacted.

Why is this? Because policy makers never actually listened to the uninsured to find out why they rejected what was available. Policy makers never treated them as an untapped market that did not care for the existing products. Policy makers decided that they should enroll whether they liked it or not. But these dogs just don’t like the dog food.

[First Posted on John Goodman’s Health Policy Blog]