Study: Medicaid Improves Mental But Not Physical Health

A new study reveals that uninsured adults who receive Medicaid coverage experience negligible effects on their physical health, but substantially improve their mental well-being. It previews how the federal law could impact poor, childless adults who get coverage through the Medicaid expansion.
May 2, 2013

Uninsured adults who receive Medicaid coverage -- as many will under the Affordable Care Act (ACA) next year -- experience negligible effects on their physical health, but substantially improve their mental well-being, according to a new report released Wednesday.

Researchers at the Harvard School of Public Health and the Massachusetts Institute of Technology (MIT) studied participants in the Oregon Health Insurance Experiment, a localized initiative to extend Medicaid coverage to low-income uninsured adults, for two years. Because the Oregon program’s population is similar to the kind of people who will be covered by Medicaid next year under the ACA, the findings offer an early preview at how the federal law will impact poor, childless adults.

The most significant finding of the study, which was published in the New England Journal of Medicine, was how the mental state of Medicaid beneficiaries improved: The percentage of those suffering from depression dropped from 30 percent to 21 percent. Overall, those covered by Medicaid self-reported that their mental health was better after two years in the program.

Medicaid has historically had better mental health coverage than private insurance, and its recipients have routinely been more likely to suffer from mental health problems. A Gallup poll released last month found 22 percent of Medicaid enrollees said they experienced depression, compared to 7 percent of those with private employer-based coverage. If all 50 states expanded Medicaid under the ACA (expansion is optional in the wake of the Supreme Court's ACA ruling last June) as many as 2.8 million people with a serious mental illness would be covered by the program, according to estimates from Avalere Health, an independent consulting firm.

Those statistics have made expanding mental health coverage a rallying cry in the broader push for states to accept the Medicaid expansion, as Governing has previously reported. With a dozen or so states still undecided on the issue, the new study’s findings were welcomed by advocates, who cite it as further proof that expanding Medicaid would have tangible benefits.

“If people are covered, they’ll be able to nip things in the bud and get treatment earlier. Getting treatment earlier means people won't have big interruptions in their lives,” says Debbie Plotnick, senior director of state policy at Mental Health America, an advocacy group. “Especially for people with mental health conditions, the further upstream you can step and intervene, the better the outcomes for the patients.”

On the physical side of things, though, the Harvard/MIT study found less of an impact. Rates of hypertension or high cholesterol were unchanged, and patients with diabetes saw no significant improvement in controlling their blood sugar. If there was a benefit to Medicaid coverage, it’s that enrollees were more likely to be diagnosed with diabetes and they were more likely to use their prescribed diabetes medication. Generally speaking, Medicaid coverage increased the use of health care services, such as doctor visits and prescription drugs.

Medicaid also eased the burden on enrollees’ wallets. Enrollment in the program essentially eliminated out-of-pocket catastrophic medical spending, defined as out-of-pocket spending that exceeds more than 30 percent of a household’s annual income, the study concluded. Other financial burdens related to health care were also reduced.

Amy Finkelstein, an economics professor at MIT and co-author of the study, summarized its core findings in a statement that accompanied its release: “The study highlights the important financial protections that Medicaid provides, as well as the substantial improvements in mental health, but does not provide evidence that Medicaid coverage translates to measurable improvements in physical health in the first two years.”

The Oregon Health Insurance Experiment, started in 2008, extended Medicaid coverage to low-income uninsured adults by lottery. More than 90,000 applied to participate for 10,000 slots. Harvard and MIT researchers compared the health and fiscal wellbeing of those who were selected for the program with those who weren’t as the basis for the study released this week.

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