Medicaid Increases Emergency-Department Use: Evidence from Oregon's Health Insurance Experiment

Health Economy? The intensity of arguments over social science issues often seems inversely correlated with the quantity of experimental evidence. Taubman et al. (p. 263, published online 2 January; see the Policy Forum by Fisman) report on the latest analysis of an ongoing controlled experiment—the Oregon Health Insurance Experiment—that seeks to identify and quantify the effects of extending health insurance coverage to a low-income adult population. A substantial increase was observed in visits to the emergency departments of hospitals, corresponding to approximately 120 U.S. dollars per year more in hospital costs. Expanding health coverage of low-income adults can result in increased usage of hospital emergency departments. In 2008, Oregon initiated a limited expansion of a Medicaid program for uninsured, low-income adults, drawing names from a waiting list by lottery. This lottery created a rare opportunity to study the effects of Medicaid coverage by using a randomized controlled design. By using the randomization provided by the lottery and emergency-department records from Portland-area hospitals, we studied the emergency department use of about 25,000 lottery participants over about 18 months after the lottery. We found that Medicaid coverage significantly increases overall emergency use by 0.41 visits per person, or 40% relative to an average of 1.02 visits per person in the control group. We found increases in emergency-department visits across a broad range of types of visits, conditions, and subgroups, including increases in visits for conditions that may be most readily treatable in primary care settings.