EDITORIAL: Medicaid study more bad news for Obamacare, taxpayers

The Patient Protection and Affordable Care Act aimed to reduce overall medical costs by pushing low-income and uninsured Americans out of emergency rooms and into doctor’s offices and urgent care centers for the treatment of less-serious ailments. Obamacare was written with the belief that insuring millions of people would immediately make them more responsible health care consumers.

Like so much of the law, the goal was rooted in wishful thinking. That’s because most Americans newly covered under Obamacare have been enrolled in expanded Medicaid, the taxpayer funded, low- to no-cost health plan for the poor and disabled. And a new study has found that Medicaid patients use emergency rooms 40 percent more often than others (including the uninsured), often for conditions that can be treated less expensively through in-office care, and without significant improvements in health.

The research, published Thursday by the journal Science, suggests Obamacare’s Medicaid expansion will dramatically raise costs for taxpayers and do nothing to alleviate emergency room crowding. If anything, it could make emergency room waits even longer.

The study was based on data from Oregon’s expansion of Medicaid five years ago. The state conducted a lottery to enroll residents who were on a Medicaid waiting list. However, the lottery also created a comparison group of similar people not enrolled in Medicaid for the purpose of evaluating the program through a randomized, controlled study. Researchers were given access to the hospital records of thousands of people over an 18-month period.

Medicaid patients had an average of 1.43 emergency room visits, while those who lost the lottery had an average of 1.02 ER visits. And many Medicaid patients were diagnosed with problems better addressed through primary care.

You don’t have to be an economist to understand what happened in Oregon, but it doesn’t hurt. “When you lower the price of something, you’re more likely to use it more,” said Katherine Baicker, a professor of health economics at the Harvard School of Public Health. “That’s what we see when we look at the emergency department, hospitals, doctors offices, prescriptions.”

In other words, when you give patients blank checks for their health care, they’re too happy to use them. They have no incentive to take a more cost-effective approach. Compare the considerations of a Medicaid patient against those of someone covered by a new Obamacare-compliant plan. The Medicaid patient knows an emergency room costs him nothing. The insured patient knows he has a high co-pay and a deductible that runs thousand of dollars. Who’s more likely to make an unnecessary emergency room visit?

This is one reason why Nevada Gov. Brian Sandoval, in expanding Medicaid here, last year proposed imposing a small co-pay on some beneficiaries, as about 20 states already do. Not all Medicaid patients are irresponsible, of course. But he wanted these patients to have the smallest amount of skin in the game. That idea died.

Come next January, at the end of the first year of Obamacare, the Medicaid numbers won’t lie. Right now, they look like another broken promise.