How should the new Medicaid study change our policy preferences?

This is a joint post by Austin Frakt and Aaron Carroll, part of our continuing coverage of the new Medicaid study.

Tyler Cowen isn’t the only one to have suggested that the new study should be an opportunity to reflect on policy preferences. His post is very good.

The key question here is how we should marginally revise our beliefs, or perhaps should have revised them all along (the results of this study are not actually so surprising, given other work on the efficacy of health insurance).  For instance should we revise health care policy toward greater emphasis on catastrophic care, or how about toward public health measures, or maybe cash transfers?  (I would say all three.)  One might even use this study to revise our views on what should be included in the ACA mandate, yet I haven’t heard a peep on that topic.  I am instead seeing a lot of efforts to distract our attention toward other questions.

We think it is important to keep striving for better policy, and evidence-informed policy in particular. We welcome new and different ideas, but insist on reconciling them with evidence. Austin’s evidence-based examination of health policy books like those by John Goodman and David Goldhill, along with consideration of all major, new health policy proposals by various authors here, is evidence of that. So, we welcome the conversation Cowen suggests and offer the following thoughts.

First of all, as evidenced by our latest post, we’re still digging into the details of the new Oregon Health Study results. If, as it seems, it was underpowered, it does not provide as clear guidance as we might have hoped. Either way, as Cowen points out, the study doesn’t differ from what we know from prior work. How much should it change our thinking, then? Or yours? It’s quite reasonable to say, “Not that much,” though it depends on your starting point. And that is (or can be) an evidence-based interpretation, whether that is incorrectly spun as a distraction or a dodge or not. Shouldn’t we all want to interpret the evidence properly before applying it to policy? Well, that’s our ambition.

Nevertheless, some reconsideration of the Medicaid policy space is a worthwhile exercise because elected officials in many states are still contemplating whether to expand Medicaid and, if so, how. Let’s step back and look at that space.

We had a long, national conversation about health reform in 2008-2009. This followed about a century of many, similar conversations. It culminated in the passage of a law by a process that was, in our view, no more or less legitimate than the passage of most other laws. The law, or parts thereof, was considered in the courts, including by the Supreme Court, and then reconsidered as part of the 2012 presidential campaign.

Through all this, the law remains, though the Supreme Court adjusted it to offer states a choice about Medicaid expansion. The choice is not binary, whether to expand or not, but offers a circumscribed span of policy options. The Administration has been more flexible than it could have been in welcoming options that seemed impossible a year ago (e.g., Arkansas’s private option).

The upshot is states have a choice today, as provided by the law and regulations, that includes no expansion of Medicaid and a range of other options. To be sure, that range is not infinite. There are things that the law, regulations, and the Administration would not accept. Those may include policy options preferable to many people, including conservatives, including liberals, including us.

Unless and until the law and/or administration change, those options are not likely to expand much, especially by 2014. Within this space, and in light of the findings of the latest Medicaid study, and consideration of the body of work that preceded it, it is our view that expansion of Medicaid, in some fashion permitted today, is preferable to no expansion at all.

You need not hold that view, but it is not an unreasonable one, even acknowledging the latest study.

Now, going forward, we certainly think it is reasonable to continue to discuss how Medicaid might evolve. That’s fine. But, as we do so, we would hope that poor Americans would be afforded the greater access to the financial and mental and physical benefits of coverage for health care that Medicaid (in some form) would provide. We spend a great deal assisting wealthier Americans to do the same, through the preferential tax treatment of employer-sponsored plans, as well as through Medicare. All of that can and should be examined too. But by what reasonable moral calculus is it just to not extend medical financial assistance to the poor as we do so?

Let us be clear, we recognize that those who object to Medicaid expansion have also stated they want to assist the poor. They just have other ideas of how to do so. Fine. Our question is, which is stronger evidence that you want to help poor Americans, that you will support Medicaid expansion while inviting continued conversation about how to make the program more efficient and effective? Or by blocking expansion and offering alternatives, alternatives that will take well beyond 2014 to enact and implement, if they ever are?

For, one way to justify doing nothing is to continually suggest something else.

We do not object to something else, unless that something else includes leaving poor Americans without the financial and health protections of at least Medicaid in 2014. States have a fairly wide range of choices as to what “Medicaid” means in their domains. We encourage them to pick one, and, yes, by all means continue to fight for change. Our pledge is to continue to consider proposals for it on this blog and in light of evidence.

@afrakt and @aaronecarroll

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