As the Affordable care Act matures, many states still have refused to expand the Medicaid program. This has left millions of Americans without insurance this year, as the law contains no means to provide subsidies for those making less than the federal poverty line to buy private insurance in the exchanges. Some states continue to negotiate with the Obama administration for waivers to build some sort of compromise, but things have stalled in many areas of the country.

One of the reasons held up as a means to refuse the expansion is that costs will be too much for state governments to bear. They believe that the uninsured, as a class, are unhealthy. Indeed, much of the rhetoric of reform has focused on the fact that those with chronic conditions have been refused policies in the past; when able to obtain them, they have been prohibitively expensive. Therefore, it’s not a great leap to believe that the health care expenses of the newly insured will be large.

Moreover, those who have been previously eligible for Medicaid, but uninsured, will not be covered by the federal government at the same 100% rate that the newly eligible will be. Their costs will be born much more at the state level, adding an additional disincentive for many states to work to expand Medicaid coverage.

A new study in Health Affairs adds to our knowledge base concerning the relative health of the uninsured:

We used simulation methods and data from the Medical Expenditure Panel Survey to compare nondisabled adults enrolled in Medicaid prior to the ACA with two other groups: adults who were eligible for Medicaid but not enrolled in it, and adults who were in the income range for the ACA’s Medicaid expansion and thus newly eligible for coverage. Although differences in health across the groups were not large, both the newly eligible and those eligible before the ACA but not enrolled were healthier on several measures than pre-ACA enrollees.

What they found is somewhat surprising, given the previously mentioned rhetoric. Adults who were newly eligible for Medicaid had equal or better physical health than those who were covered by Medicaid already. They also had equal or better mental health and fewer depressive symptoms. Moreover, even the previously eligible, but not covered adults, were equally in the same or better mental and physical health. They also had less asthma, diabetes, and obesity than those already covered by Medicaid.

In some ways, this makes a fair amount of sense. Medicaid does not function in the same way that private insurance does. Since people do not “pay” for it, there’s much less of a reason for healthy people who are eligible to get it. There’s much less of a financial penalty to be paid for signing up late than with private insurance.

Given this fact, it’s possible that the sicker eligible patients have already obtained coverage. Therefore, those who might obtain coverage now may be healthier in general.

This is great news for states that are worried about Medicaid costs. Remember that Medicaid spending is almost entirely related to actual health spending. Those that consume no care really cost nothing to the state. So “signing up” healthy people adds no burden to the state, unless people need care.

This is not the first study to find this result. Much of the recent literature supports these findings. Expanding Medicaid eligibility would provide millions of Americans with the peace of mind that they are protected should they need care. It would provide them with necessary access if they get ill. It’s great news that the expansion might cost less than predicted, and states should take this into consideration as they consider their options.


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