Expanded Medicaid coverage in Oregon eased the financial strain of medical expenses for low-income people, but didn't produce immediate health improvements by certain measures, according to newly released research.

The latest results from the Oregon Health Study, published on Thursday in the New England Journal of Medicine, come at a time when state legislatures are mulling whether or not to adopt Medicaid expansion requirements outlined in the vast health reform law passed in 2009.

While newly enrolled Medicaid participants used more health services and preventative care, they didn't score better on blood pressure or cholesterol levels than a control group of low-income adults that weren't enrolled in Medicaid, the study found. Some conservative commentators have been quick to integrate this point their arguments against the Medicaid expansion, which would make it easier for low-income adults under 65 years old to obtain health insurance.

“This throws up a huge stop sign in front of the Medicaid expansion,” Cato Institute health policy director Michael Cannon told the Washington Post. “The benefits are highly questionable.”

James Pethokoukis, a columnist for the conservative think tank American Enterprise Institute, called the study a “bombshell” in an article for Business Insider.

However, the study subjects have only been enrolled in Medicaid for two years at most. New York Times economics reporter Annie Lowrey pointed out in a blog post that this latest paper is far from a comprehensive evaluation of the expansion.

The study “says nothing about the chance of diagnosis of, eventual health outcomes for or costs associated with any form of cancer, Alzheimer’s, Parkinson’s or dozens of other debilitating medical conditions,” Lowrey wrote on Wednesday. “It also says nothing about health results outside of a two-year time frame.”

While Medicaid expansion in Oregon didn’t immediately impact participants' cholesterol levels, the study did find that it succeeded at the primary goal of medical insurance: making sure that people don’t go broke when they get sick or injured.

“Medicaid virtually eliminated out-of-pocket catastrophic medical expenditures and reduced the probability of having to borrow money or skip paying other bills because of medical expenses by more than 50 percent,” the Oregon Health Study Group wrote on its website.

Medicaid coverage also had a positive impact on mental health -- participants had a rate of depression 30 percent lower than those not enrolled.

The fact that the Oregon study exists at all is lucky – in 2008, the state found itself with some extra funds that would allow for a limited Medicaid expansion. 90,000 people applied for about 10,000 spots, so Oregon held a lottery to select applicants. Having such a large sample of people vying for Medicare coverage presented the researchers with an opportunity that practically never shows itself in public policy: the chance to do a large randomized experiment with a well-matched control group.

Two years after the lottery took place, the Oregon Health Study group – led by Massachusetts Institute of Technology economist Amy Finkelstein and Harvard health economist Katherine Baicker -- gathered data on 6,387 adults that won a spot from the lottery and applied for Medicaid, and 5,842 adults that weren't selected in the lottery.

“We know, by construction, that those who won the lottery and those who lost the lottery are identical except that some got coverage,” Finkelstein told the Washington Post. “We can attribute any differences to the effect of insurance.”

The 2014 Medicaid expansion written into the health reform law would open up Medicaid to virtually all citizens under 65 years old with a family income under 133 percent of the federal poverty level (in 2012, nearly $31,000 for a four-person family). The Congressional Budget Office estimates that by 2022, 11 million Americans will get health insurance thanks to the Medicaid expansion provision.

This expansion is especially beneficial for poor adults with no children. As of 2009, one year before the Patient Protection and Affordable Care Act went into effect, most states didn't allow childless adults to enroll in Medicaid. Even for parents, the income requirements seemed to exclude all but the truly destitute. At the time, 17 states set the eligibility bar for parents at 100 percent of the federal poverty level (in 2012, $23,050 for a family of four); another 17 states limited Medicaid to parents making 50 percent or less of the federal poverty level ($11,525 for a family of four).

Originally, states would have faced penalties if they didn't expand their Medicaid programs -- the withholding of federal Medicaid funds -- but the June 2012 Supreme Court ruling that upheld the health care law curtailed the federal government’s ability to do so.

SOURCE: Baicker et al. “The Oregon Experiment – Effects of Medicaid on Clinical Outcomes.” New England Journal of Medicine 368:1713-1722, 2 May 2013.

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