Study: ER Visits Increase 40 Percent With Expanded Medicaid

Obamacare proponents have boasted the overhaul will reduce health care costs, but a new study undercuts that argument.

A sign giving direction to the University of Miami Hospital's emergency department hangs on a wall on April 30, 2012, in Miami.
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A landmark study published this week found that expanding Medicaid increased emergency room visits by 40 percent over an 18-month period. The study used emergency department records from 18 Portland, Ore., hospitals to track the emergency department use of roughly 25,000 people.

Researchers from Harvard University, Columbia University and the Massachusetts Institute of Technology -- along with the Center for Outcomes Research and Education and the National Bureau of Economic Research -- produced this most recent study as part of The Oregon Health Insurance Experiment.

"What our study has done is demonstrate that there are both costs and benefits to Medicaid," says Amy Finkelstein, a study author and a professor of economics at MIT.

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Medicaid expansion represents only one portion of the broader Obamacare overhaul, but it's a significant lump of the program's costs. Roughly 3.9 million people were deemed eligible for Medicaid or the Children's Health Insurance Program (CHIP) in October and November of 2013, the Department of Health and Human Services reported this week. The department did not provide a breakdown of each program.

The study found that people on Medicaid increased their use of the emergency room by 40 percent compared to a similar low-income group that was eligible for Medicaid but didn't receive it. The findings imply that increased ER visits can translate to increased health care costs.

"We find 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," the study noted.

Medicaid coverage also increased across primary care visits, prescription drug use and in-patient hospitalizations, Finkelstein says.

To conduct their research, Finkelstein and her colleagues took advantage of a special lottery system that the Oregon Health Plan (OHP) used in 2008 to expand its Medicaid program. Those who won the lottery received public health care. The remaining individuals inadvertently formed a control group for the experiment.

The lottery gave economists and researchers a chance that's rarely available in public policy: the opportunity to track the impact of a program using a randomized control design.

"Imagine a drug trial that didn't have a control group where you said, 'We gave a bunch of people allergy medication in the winter and they stopped sneezing, therefore the medication worked,'" says Kate Baicker, also a study author and a professor of health economics at the Harvard School of Public Health. "Nobody would accept that. You would say, 'Where's the control group? What would have happened to them in the absence of the medication?'"

But that's the way studies in public policy are often run, Baicker says, because designing a study where one group is given the advantage of a certain public program and another isn't is rarely possible. As a result, other less scientific studies often generate misleading conclusions, she says.

"If you don't have a good control group, you may think Medicaid is killing people when in fact it is not," Baicker says.

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Medicaid expansion was a provision that was stripped from Obamacare after the Supreme Court ruled the decision was up to individual states' discretion and could not be mandated by the federal government. As of December, 25 states and Washington, D.C., have expanded their Medicaid programs, according to the nonprofit Kaiser Family Foundation. Twenty-three other states, including Texas and Florida -- which both have a large number of low-income residents that would be eligible for Medicaid under the new rules -- have not. Two states, Pennsylvania and Indiana, plan to expand their programs after 2014.

Any study of health care right now is sure to trigger political debate by substantiating certain arguments and rejecting others, Finkelstein says.