Planet Money
6:13 pm
Fri June 15, 2012

Episode 379: Does Medicaid Actually Help People?

Originally published on Wed June 20, 2012 12:28 pm

For decades there was this debate about Medicaid, the health insurance program for the poor.

On one side were people making what seems like the straightforward argument: People who get Medicaid fare better than people who don't.

On the other side were those making the contrarian argument. They argued that there is already a safety net for the poor and the uninsured, and that Medicaid's reimbursement rates are so low that most doctors don't see Medicaid patients anyway.

The debate was perennial and unresolvable. You couldn't simply compare people with Medicaid to those without, because the two groups had different characteristics.

To truly answer the question, you would need to take a big group of people, and randomly divide them into two groups. One group would get Medicaid, and the other wouldn't. But doing that would be unethical.

Then, a few years back, Oregon announced that it had 10,000 new slots in its Medicaid program. Far more than 10,000 people wanted to enroll. So the state held a lottery.

The state of Oregon didn't mean to be creating the perfect experiment to test whether Medicaid actually helps people. But that's what it was doing.

Katherine Baicker, a health economist at Harvard, followed people who entered the Oregon Medicaid lottery — and she compared the outcomes between those who were given Medicaid, and those who were denied.

On today's show, we talk to her about what she learned — and we hear what the findings mean for the debate over health care in America.

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Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.