Thursday, August 15, 2013

Why Obamacare Is Oversold

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Robert J. SamuelsonRobert J. SamuelsonOpinion WriterWhy Obamacare is oversold By Robert J. Samuelson, Robert J. SamuelsonMay 09, 2013 05:47 PM EDT

The Washington Post

It’s the great moral imperative behind the Affordable Care Act (“Obamacare”): People should not be denied health care because they can’t afford insurance. Health status and insurance are assumed to be connected, and opponents have often been cast as moral midgets, willing to condemn the uninsured to unnecessary illness or death. The trouble is that health status and insurance are only loosely connected. This suggests that Obamacare may result in more spending and health services but few gains in the public’s health.

We now have a study based on Medicaid in Oregon implying just that. Judging the effect of insurance on health has always been difficult, because the uninsured are different from the insured: They’re poorer, younger and often sicker. How much of their worse health reflects a lack of insurance? To answer, researchers need to compare similar people with and without insurance.

Robert J. Samuelson

Samuelson writes a weekly column on economics.

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Oregon’s expansion of Medicaid — the federal-state insurance for the poor — unwittingly solved this problem. In 2008, the state decided to increase enrollment by 10,000. But there were 90,000 people on the waiting list, so the state adopted a lottery to decide who would receive coverage. The result was two similar groups of poor people — one with insurance (Medicaid) and one without — that could be compared. The New England Journal of Medicine recently published the study.

The most overlooked finding is that the uninsured already receive considerable health care. On average, the uninsured annually had 5.5 office visits, used 1.8 prescription drugs and visited an emergency room once. Almost half (46 percent) said that they “had a usual place of care,” and 61 percent said that they had “received all needed care” in the past year. About three-quarters (78 percent) who received care judged it “of high quality.” Health spending for them averaged $3,257.

True, when people were covered by Medicaid, many of these figures rose. The annual number of office visits went to 8.2; the number of drugs, to 2.5; the share of patients with a usual place of care, to 70 percent; the proportion receiving all needed care, to 72 percent. Preventive care also increased. The share of patients receiving screening for cholesterol moved from 27 percent for the uninsured to 42 percent; the share of women older than 50 having mammograms jumped from 29 percent to 59 percent; the share of men older than 50 getting PSA tests for prostate cancer doubled, from 21 percent to 41 percent. Spending rose to $4,429.

Unfortunately, the added care and cost didn’t much improve physical health. The study screened for high blood pressure, high cholesterol, diabetes and the risk of heart attack or stroke. No major differences were detected between the uninsured and Medicaid recipients. There was more treatment for diabetes, although no difference was found between the two groups on a key indicator of the disease.

The only major health gain was psychological. Depression dropped from about 30?percent to 21?percent between the groups. One reason may have been that Medicaid recipients don’t fear huge medical bills. Their out-of-pocket health costs were $337. For the uninsured, out-of-pocket costs were 64 percent higher. (Presumably, most non-out-of-pocket costs for the uninsured were covered by free clinics, charity care and uncollected debt.)

“Health insurance is a financial product that is aimed at providing financial security,” the study says. On that ground, the expansion succeeded; by most clinical measures, it didn’t. Perhaps it is too early. The expanded Medicaid coverage was only two years old at the time of the study. Maybe greater health improvements will emerge. But maybe they won’t, and not only because the uninsured already receive care. Many uninsured are relatively healthy; insurance won’t make them healthier. For others, modern medicine can’t cure every health problem. For still others, bad luck or bad habits are hard to change. About two-fifths of Oregon’s uninsured were obese or smoked; Medicaid didn’t alter that.

Much of this was known — or could have been surmised — during the debate over Obamacare. The Congressional Budget Office reported that the uninsured typically received 50 to 70 percent of the care of the insured. A study in 2007 of the 1965 creation of Medicare — insurance for the elderly — concluded that it had “no discernible impact on elderly mortality” in the first 10 years but improved recipients’ financial security by limiting out-of-pocket expenses.

Obamacare’s advocates ignored these ambiguities. They were too busy flaunting their moral superiority. Universal health insurance is a legitimate goal, but 2009 — in the midst of a major economic crisis — was the wrong time to pursue it. Predictably, it polarized public opinion and subverted confidence for what seem to have been, based on the available evidence, modest likely public health improvements. The crusade for universal coverage has been as much about advocates’ sense of self-worth as about benefits for the uninsured.

Read more from Robert Samuelson’s archive.

Read more at PostOpinions:

Matt Miller: Republicans to sick people: Tough luck

George F. Will: Obamacare’s contract problem

Drew Altman and Larry Levitt: We still have a health-care spending problem

The Post’s View: Repairing Medicare

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