Medicaid, the health insurance program for poor people, has received renewed attention, not only from politicians in their search for more spending cuts but also from scientists who studied the program’s effects on its beneficiaries. A yearlong survey showed compelling evidence that recipients of Medicaid benefit in numerous ways from being insured by comparison to those who have no coverage at all.

The study, which was published by the National Bureau of Economic Research, was only possible because of a unique situation that occurred in Oregon in 2008. When the state tried to expand Medicaid coverage for 10,000 additional qualifiers it received almost 90,000 applications, which vastly exceeded the assigned budget. So lawmakers decided to hold a lottery and pick lucky winners at random.

As devastating as this solution may have been for those who lost out, it gave scientists a chance to investigate the lives of people who have access to health insurance and compare them to those who don’t. “This was literally a once-in-a-lifetime opportunity,” said Dr. Amy Finkelstein, professor of economics at Massachusetts Institute of Technology (M.I.T.) and one of the principal investigators involved in the study. The lottery let the researchers compare groups within the population that were similar in many ways except for their health insurance status. This kind of randomized controlled trial is considered the “gold standard” in scientific studies.

Once the randomly chosen beneficiaries were enrolled in Medicaid, they were entered into the survey along with thousands of others who lost out and remained uninsured. Even during their first year of data collecting, the researchers found considerable differences. Those who had gained coverage used medical services much more extensively than those who hadn’t, adding an extra 25 percent in medical expenditures. They were 35 percent more likely to schedule regular doctor- or hospital visits. Insured women had 60 percent more mammograms. 70 percent said they visited the same medical care facility more than once and 55 percent had a family physician. 15 percent were more likely to use prescription drugs and 30 percent sought admission to a hospital sooner than the uninsured.

The researchers were also interested in other elements of well-being, such as stress- and happiness levels. They found that those with Medicaid coverage were 25 percent more able to pay their medical bills and 40 percent less likely to fall into debt. “Being uninsured is incredibly stressful from a financial perspective, a psychological perspective, a physical perspective. It is a huge relief to people not to have to worry about it day in and day out,” said Dr. Finkelstein.

Almost a quarter of the newly insured also reported that they felt altogether healthier, and almost half said that previous health problems had at least not worsened since they gained coverage.

If these findings don’t sound all that surprising, it is because they aren’t. As Dr. Finkelstein pointed out, Medicaid works like any other insurance, namely to shield people from financial catastrophe. Even if nothing bad happens, the knowledge of being protected has its benefits. Just being able to rely on a basic safety net gives people peace of mind, which is an essential component of good health.

The findings of this study are dramatically at odds with the traditional arguments of Medicaid’s critics. “Medicaid is worse than no coverage at all,” wrote Scott Gottlieb, a physician and fellow at the conservative American Enterprise Institute, not long ago in the Wall Street Journal. Other voices on the political right have suggested that Medicaid was redundant because there was already a safety net for the poor in place, such as emergency rooms, charity care, free clinics or the option of simply not paying a doctor’s bill (seriously!). And then there is the argument that many doctors in private practice don’t accept the insurance anyway, so why bother having it.

As congress looks for more opportunities to cut spending and states struggle with ever-deepening budget holes, health insurance for the poor continues to be a target. “I’m not naïve enough to think this paper will make Medicaid’s most ardent critics rethink their position,” writes Jonathan Cohn, a senior editor at The New Republic. “But,” he goes on, “it should.”

• Gina Kolata, “First Study of Its Kind Shows Benefits of Providing Medical Insurance to Poor” – The New York Times (7/7/2011)

• Jonathan Cohn, “Are You Better Off With Medicaid Than No Insurance?” – Kaiser Health News in collaboration with The New Republic (7/7/2011)


Timi Gustafson R.D. is a clinical dietitian and author of the book “The Healthy Diner – How to Eat Right and Still Have Fun”®, available in bookstores, at and at You can also follow Timi on Twitter at