Insurance Experiment : Evidence from the First Year

In 2008, a group of uninsured low-income adults in Oregon was selected by lottery to be given the chance to apply for Medicaid. This lottery provides a unique opportunity to gauge the effects of expanding access to public health insurance on the health care use, financial strain, and health of lowincome adults using a randomized controlled design. In the year after random assignment, the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected. We find that in this first year, the treatment group had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations), lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported physical and mental health than the control group. + We are grateful to Josh Angrist, Robert Avery, David Autor, Ethan Cohen-Cole, Carlos Dobkin, Esther Duflo, Jack Fowler, Guido Imbens, Larry Katz, Jeff Kling, John McConnell, Jon Levin, Richard Levin, Ben Olken, and Alan Zaslavsky for helpful comments and advice, to Brandi Coates, Michael Gelman, John Graves, Ahmed Jaber, Andrew Lai, Conrad Miller, Iuliana Pascu, Adam Sacarny, Nivedhitha Subramanian, Zirui Song, James Wang, and Annetta Zhou for expert research assistance, and to numerous Oregon state employees for help acquiring the necessary data and for answering our many questions about the administration of state programs. We gratefully acknowledge funding from the Assistant Secretary for Planning and Evaluation in the Department of Health and Human Services, the California HealthCare Foundation, the John D. and Catherine T. MacArthur Foundation, the National Institute on Aging (RC2AGO36631 and R01AG0345151), the Robert Wood Johnson Foundation, the Sloan Foundation, the Smith Richardson Foundation, and the U.S. Social Security Administration (through grant 5 RRC 08098400-03-00 to the National Bureau of Economic Research as part of the SSA Retirement Research Consortium). We also gratefully acknowledge Centers for Medicare and Medicaid Services’ matching funds for this evaluation. The findings and conclusions expressed are solely those of the author(s) and do not represent the views of SSA, the National Institute on Aging, the National Institutes of Health, any agency of the Federal Government, any of our funders, or the NBER. Author affiliations: a: National Bureau of Economic Research; b: Massachusetts Institute of Technology; c: Center for Outcomes Research and Education at Providence Health & Services; d: Harvard; e: In addition to the individuals named above, The Oregon Health Study Group includes Matt Carlson (Portland State University), Tina Edlund (Deputy Directory, Oregon Health Authority), Charles Gallia (Oregon DHS), Eric Schneider (RAND), and Jeanene Smith (Office for Oregon Health Policy and Research). See author disclosures following text.

[1]  A. Banerjee,et al.  Targeting the Poor: Evidence from a Field Experiment in Indonesia , 2010, The American economic review.

[2]  Matthew J. Notowidigdo,et al.  Health Insurance and the Consumer Bankruptcy Decision: Evidence from Expansions of Medicaid , 2011 .

[3]  J. Gruber,et al.  Medicare Part D and the Financial Protection of the Elderly , 2010 .

[4]  Carlos Dobkin,et al.  The Effect of Health Insurance Coverage on the Use of Medical Services , 2010 .

[5]  W. Steven Barnett,et al.  Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects , 2010 .

[6]  B. Olken,et al.  Indonesia's PNPM Generasi program : interim impact evaluation report , 2010 .

[7]  Simone Schaner.  Intrahousehold Preference Heterogeneity , Commitment , and Strategic Savings : Theory and Evidence from Kenya ∗ , 2010 .

[8]  Ryan T. Moore,et al.  Public policy for the poor? A randomised assessment of the Mexican universal health insurance programme , 2009, The Lancet.

[9]  Amy N. Finkelstein,et al.  What did Medicare do? The initial impact of Medicare on mortality and out of pocket medical spending , 2008 .

[10]  C. Gallia,et al.  How effective are copayments in reducing expenditures for low-income adult Medicaid beneficiaries? Experience from the Oregon health plan. , 2008, Health services research.

[11]  David Card,et al.  Does Medicare save lives? , 2008, National Bureau of Economic Research bulletin on aging and health.

[12]  M. Carlson,et al.  Short-Term Impacts of Coverage Loss in a Medicaid Population: Early Results From a Prospective Cohort Study of the Oregon Health Plan , 2006, The Annals of Family Medicine.

[13]  Amy N. Finkelstein.  The Aggregate Effects of Health Insurance: Evidence from the Introduction of Medicare , 2007 .

[14]  T. Beebe,et al.  Increasing Response Rates in a Survey of Medicaid Enrollees: The Effect of a Prepaid Monetary Incentive and Mixed Modes (Mail and Telephone) , 2005, Medical care.

[15]  V. Stringfellow,et al.  The Nature of Nonresponse in a Medicaid Survey: Causes and Consequences , 2005 .

[16]  Jeffrey B. Liebman,et al.  Experimental Analysis of Neighborhood Effects on Youth , 2004 .

[17]  R. Spitzer,et al.  The Patient Health Questionnaire-2: Validity of a Two-Item Depression Screener , 2003, Medical care.

[18]  Paul S. Calem,et al.  An overview of consumer data and credit reporting , 2003 .

[19]  R. Noyes,et al.  Unexplained symptoms in primary care: perspectives of doctors and patients. , 2000, General hospital psychiatry.

[20]  T. Getzen,et al.  Health Care is an Individual Necessity and a National Luxury: Applying Multilevel Decision Models to the Analysis of Health Care Expenditures , 2000, Journal of health economics.

[21]  R. Hays,et al.  Special issues in assessing care of Medicaid recipients. , 1999, Medical care.

[22]  F. J. Fowler,et al.  Comparing telephone and mail responses to the CAHPS survey instrument. Consumer Assessment of Health Plans Study. , 1999, Medical care.

[23]  T. Bodenheimer.  The Oregon Health Plan--lessons for the nation. First of two parts. , 1997, The New England journal of medicine.

[24]  J. Gruber,et al.  Does Public Insurance Crowd Out Private Insurance? , 1995 .

[25]  Y. Chaubey.  Resampling-Based Multiple Testing: Examples and Methods for p-Value Adjustment , 1993 .

[26]  J. Angrist,et al.  Identification and Estimation of Local Average Treatment Effects , 1994 .

[27]  E. Keeler,et al.  Health insurance and the demand for medical care: evidence from a randomized experiment. , 1987, The American economic review.

[28]  Richard J. Zeckhauser,et al.  Medical insurance: A case study of the tradeoff between risk spreading and appropriate incentives☆ , 1970 .