Responsible researcher: Bruno Benevit
Original title: The Oregon Health Insurance Experiment: Evidence from the First Year
Authors: Amy Finkelstein, Sarah Taubman, Bill Wright, Mira Bernstein, Jonathan Gruber, Joseph P. Newhouse, Heidi Allen, Katherine Baicker, and Oregon Health Study Group.
Intervention Location: United States
Sample Size: 90,000 individuals
Sector: Health Economics
Variable of Main Interest: Use of health services
Type of Intervention: Health insurance eligibility
Methodology: OLS, 2SLS
Summary
Public health insurance financing policies are fundamental for low-income individuals to have access to medical care. Sizing the impact of health insurance coverage is fundamental to improving the effectiveness of health policies. To assess the impact of Medicaid in the state of Oregon, United States, this study conducted a lottery that provided the opportunity to enroll in the program, providing coverage of health services to policyholders. One year after the draw, the results indicated that those selected were 25 percentage points more likely to be insured, used more health services, had lower medical expenses and debts and had better self-reported physical and mental health compared to those who were not drawn.
Health insurance plays an important role in financial protection and ensuring access to quality medical care for policyholders. The coverage provided by these insurance policies lowers the cost barrier for medical treatments, allowing policyholders to seek care when needed without the fear of incurring exorbitant out-of-pocket expenses. By covering a wide range of medical services, from routine appointments and preventive care to hospitalizations and complex procedures, health insurance helps promote a healthier, more productive population. Furthermore, by diluting the financial risks associated with unexpected medical emergencies, health insurance provides a sense of security and well-being for individuals and their families (FINKELSTEIN et al., 2012).
Medicaid program is a significant example of health insurance targeting socioeconomically vulnerable populations in the United States. Created to provide medical coverage to low-income individuals and families, Medicaid provides an essential network of support for those who otherwise could not afford medical care. The importance of this program is amplified among vulnerable populations as it not only improves access to healthcare but also helps alleviate financial pressure by reducing out-of-pocket medical expenses and associated debt.
In the context of the United States, several states carry out regional policies associated with Medicaid , as was the case in the state of Oregon in 2008. The Oregon Health Plan (OHP) was created as a federal waiver program from Medicaid rules , consisting of two distinct programs: OHP Standard and OHP Plus. OHP Standard is a Medicaid aimed at covering low-income adults who are not categorically eligible for OHP Plus (which targets pregnant women, people with disabilities, and families enrolled in other social programs). The Standard version of the program was carried out through a lottery, allowing the measurement of the program's impacts on Medicaid in several aspects.
OHP Standard serves adults ages 19 to 64 who reside in Oregon, are U.S. citizens or legal immigrants, have been without health insurance for six months, have income below the Oregon federal poverty level (FPL), and have assets less than $2,000. The program offers comprehensive benefits with no copay from consumers, covering medical services, prescription drugs, core hospital benefits, mental health and addiction services, hospice care and some durable medical equipment. However, it does not cover vision or non-emergency dental services. Care is primarily provided by managed care organizations, with monthly premiums ranging from $0 to $20, depending on income. At its peak in 2002, about 110,000 people were enrolled in the OHP Standard, but due to budget cuts, the program was closed to new enrollments in 2004.
In 2008, due to declining enrollment and budget availability, the state decided to reopen the program to 10,000 additional adults. A public awareness campaign was undertaken, and a reservation list was created, allowing registration by phone, fax, mail, online or in person. Over five weeks, 89,824 individuals were added to the list. The state conducted eight random drawings from March to September 2008, selecting 35,169 individuals from 29,664 households to apply for the OHP Standard. Approximately 30% of those selected successfully applied, while the remainder were unable to submit the required documentation or were deemed ineligible due to income. Enrollees could remain in the program indefinitely as long as they confirmed their eligibility every six months.
This study used a combination of administrative data and a mail survey to evaluate the impacts of the OHP Standard. The survey was sent in seven waves during July and August 2009 to nearly all randomly selected individuals and an approximately equal number of unselected individuals. The basic survey involved three mailing attempts, resulting in a 36% response rate. To increase the response rate, a more intensive protocol was applied to approximately 30% of non-respondents, including additional tracking efforts, mailings, and telephone contacts. This resulted in an additional 22% response rate for those who received the intensive protocol, culminating in an effective response rate of 50% when weighted by the inverse probability of inclusion in the intensive follow-up subsample.
In addition to the main survey, data were compared with two previous nearly identical surveys conducted with the same population: an initial survey conducted approximately one year after randomization and a six-month survey conducted midway between the initial and main surveys. The six-month survey was administered to a 20% subsample of the sample used in the other two surveys and yielded response rates of 45% and 42%, respectively. This initial data was primarily used to construct “lottery list” variables that helped examine the prerandomization demographic balance between the treatment and control groups.
Medicaid enrollment history of lottery list participants from before the drawing through September 2009. These data were used as the primary measure of insurance coverage. participants Food Stamp and Temporary Assistance to Needy Families benefit history Outcomes were measured from the date individuals were notified of their selection through the end of September 2009, representing an average observation period of 16 months after notification and 14 months after coverage approval for those who applied with success in the OHP Standard. If an individual obtained insurance through the lottery, coverage was applied retroactively to a few days after the state sent the application, generally one month after the notification date and one month before the approval date.
The study used an Ordinary Least Squares (OLS) method to estimate Intent to Treat (ITT) to assess the impact of winning the OHP Standard lottery. This method compared results between the treatment group (lottery winners) and the control group (not selected). Variables such as household size and survey wave were considered to control observable characteristics between groups. In addition to the main variables, the study included additional covariates related to the lottery to increase the robustness of the analyses, controlling for factors such as demographics of the lottery list, outcome measures before randomization, and the specific lottery draw.
Subsequently, the study used the Two-Stage Least Squares (2SLS) method to estimate the local average treatment effect (LATE) of being insured by Medicaid via the OHP Standard program. For the first stage of this regression, the probability of being insured was estimated based on the results of the program's lottery. Linear models were used for all estimates, even for binary outcomes. The standard errors of the models were grouped by the household identifier, since the treatment was carried out at the household level.
Analyzes of survey data were weighted to reflect the sampling design and ensure that results were not sensitive to different weighting methods. As outcome variables, the effects of the program on the use of hospital and medical care services, preventive care practices, financial stress resulting from health expenses, and individuals' perception of health were analyzed.
Results related to the effect (LATE) of access to Medicaid via the OHP Standard program revealed increased utilization of hospital and medical care services. Individuals in the treated group experienced an increase of 2.1 percentage points (pp) in the probability of hospital admission, mainly concentrated in non-emergency admissions. There was a proportional increase of approximately 20% in the number of hospital days, 40% in total charges and 45% in the number of procedures, the latter being statistically significant. The analysis also showed a significant increase in hospital utilization for heart disease, but found no substantial effects on the quality of outpatient or inpatient care. Furthermore, there was no detectable change in the proportion of patients going to public hospitals compared to private hospitals.
Specifically regarding medical care, estimates have shown that insurance is associated with significant increases in the use of prescription medications and outpatient care, with a 15% increase in the number of medications taken and a 55% increase in outpatient visits. There was no significant impact on emergency room use or hospital admissions. Overall, insurance increased utilization by $778 in annual spending, about 25% more compared to the control group. Furthermore, insurance increased adherence to recommended preventive care, increasing by approximately 10 pp in cholesterol and diabetes exams and by approximately 18 pp in mammography exams and Pap smears.
The results show that health insurance is associated with a statistically insignificant increase in overall financial pressure, as measured by various forms of financial stress such as bankruptcy, lien, judgment, collections, and late payments. However, there was a significant 4.8 pp reduction in the probability of unpaid bills being sent to collections, especially medical bills, indicating a positive impact of health insurance in this specific aspect. Furthermore, measures of financial stress obtained through survey data reveal a statistically significant decrease in out-of-pocket medical expenses, difficulties paying non-medical bills due to medical expenses, and refusal of medical treatment due to medical debt, reflecting financial benefits direct to policyholders. These results suggest that Medicaid provides substantial benefits to beneficiaries, not only health-wise but also financially.
The results indicate that health insurance is associated with statistically significant improvements in seven self-reported health measures, including an increased likelihood of an individual reporting their health as good, very good, or excellent, and a reduced likelihood of being diagnosed with depression. These improvements correspond to an average increase of 13 pp in self-reported positive health, a 25% increase compared to the control group. Additionally, there is evidence of an increase in perceived access to healthcare and perceived quality of care received by approximately 32%. Given the subjective nature of the responses, the authors argued that it is difficult to determine the extent to which these results reflect improvements in objective physical health or an overall increase in perceived well-being. Although initial concerns that increased contact with the healthcare system could lead to poorer health perceptions due to the diagnosis of new health problems, the results do not suggest that this outweighs the perceived positive effects of health insurance.
This study investigated the impact of the OHP Standard program on low-income beneficiaries in Oregon who were admitted to Medicaid . Through an analysis that explored the randomized experimental design of the program eligibility draw, the effects of insurance on a variety of indicators were analyzed, including health services utilization, financial issues, and perceptions of health care among beneficiaries.
Results indicate a significant increase in the likelihood of non-emergency hospital admissions, suggesting potential cost sensitivity on the part of beneficiaries. Furthermore, insurance is associated with a substantial increase in prescription drug use and outpatient visits, indicating an expansion of access to primary health care services. The study also investigated the impacts of health insurance on measures of financial stress, revealing a statistically significant reduction in the likelihood of medical bills being sent for collection and in the average amount of medical collections. Although an overall decrease in financial stress was not observed, the results suggest that insurance can ease the financial burden associated with health care, especially in cases of medical billing. Additionally, there were perceived improvements in the perceived quality of medical care and access to care, reflecting a positive response from beneficiaries to the insurance.
This study emphasizes the importance of health insurance policies that not only increase access to medical services but also reduce perceived financial barriers, contributing to financial security and quality of health care among low-income populations. Such evidence is essential for improving the focus of public policies aimed at increasing access to services for socioeconomically vulnerable populations.
References
FINKELSTEIN, A. et al. The Oregon Health Insurance Experiment: Evidence from the First Year*. The Quarterly Journal of Economics , vol. 127, no. 3, p. 1057–1106, 1 Aug. 2012.
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