Megan McArdle: Obamacare Will Probably Increase ER Visits

Supposedly, having insurance is going to make people less reliant on the Emergency Room. They will see their primary care physician instead.

Except that the only evidence we have says that the opposite will happen.

Megan McArdle writes on a new finding released from the “Oregon Medicaid Study.” This study is unique because it gives us a random sample:

A few years back, Oregon found enough money in its budget to add 10,000 people to Medicaid. Because more than 10,000 people wanted to go on Medicaid, it used a lottery to hand out slots … and thus gave researchers an excellent setup for a randomized controlled trial of the effect that health insurance had on peoples’ lives.

So one question that has been researched through the Oregon Medicaid Study is if having insurance makes you more or less likely to go to the emergency room. Since you have access to a primary care physician, does the alternative mean that you will be less likely to use the Emergency Room? Or does the presence of insurance bring down the cost of the ER visit to make you more likely to go?

People who got access to Medicaid used doctors more than people who didn’t. But they also used the ER more. And contrary to the theory that Medicaid might divert people from ERs to primary care physicians, the big increases actually came from the somewhat-less urgent problems that we were hoping to divert from ERs.

McArdle quotes Jonathan Gruber from an interview in the Washington Post:

“I would view it as part of a broader set of evidence that covering people with health insurance doesn’t save money,” says Jonathan Gruber, a health economist at the Massachusetts Institute of Technology, who has also studied Oregon’s Medicaid expansion but is not affiliated with this study. “That was sometimes a misleading motivator for the Affordable Care Act. The law isn’t designed to save money. It’s designed to improve health, and that’s going to cost money.

But that seems problematic. Perhaps Gruber is forgetting another part of the Oregon Medicaid Study. The researchers tried to measure overall health. They chose three measurements: blood pressure, cholesterol, and diabetes. According to those three measurements getting insurance did not make a person healthier.

Only two large-scale random tests have ever been done on health insurance, and both have come back with the same surprising result: giving people Medicaid, or more generous health insurance, doesn’t seem to significantly improve clinical measures of good health.

They did, however, show that free insurance helped a person avoid financial hardship and be less depressed. In my opinion, we are already seeing that Obamacare significantly increases both of those things.