Is Health Care Worth It?

Jul 11 2011 @ 1:41pm

by Zoë Pollock

In 2008 Oregon expanded its state health coverage, and extended Medicaid to 10,000 poor Oregonians who had previously gone without. It's one of the largest studies comparing those who made the lottery for health insurance, with those who didn't:

The survey also asked whether respondents were "happy, pretty happy, or not too happy." The insured were 32 percent more likely to answer "happy" or "pretty happy." This is an enormous effect. To get a sense of how large, it's helpful to use estimates from studies that link income to happiness as a benchmark. You'd have to double a participant's income to see an effect like this, making Medicaid ridiculously good value for money.

Better health is surely part of the reason for the more upbeat view of life. But insurance also relieves the financial anxieties that come with being uninsured in America—the fear that, quite literally, one wrong step could spell financial calamity. The study found that Medicaid recipients were 40 percent less likely to skimp on other financial obligations as a result of medical bills, and presumably even those that never had health problems worried less about such possibilities.

Kevin Drum stresses the quality of life factor. Yglesias examines the Medicaid angle:

What this means is that distributional issues aside, taxing people to provide people with Medicaid is an efficient means of organizing health care financing. The problem with Medicaid (and, indeed, the general problem with single-payer programs) is precisely that it’s so cheap that health care providers don’t like it very much. They’d rather accept patients who have higher-paying private insurance. But there are steps the federal government could take to ensure that providers who want access to the government’s vast array of subsidies need to see Medicaid patients.

Peter Sudeman is more critical:

“The self-reported physical health measures could reflect a more general sense of improved well-being rather than actual improvements in objective health,” the authors write. Indeed, the study finds evidence to support this conclusion: Self-reported health status improved immediately after enrollment—and before enrollees reported increased utilization of care. The level of improvement was equal to about two-thirds of the total increase in self-reported health states. The fact that enrollees were reporting substantially better health before getting any additional care suggests that the happier self-reporting reflects good feelings about personal health far more than any objective changes in medical care or condition.

Reihan seconds him.