Medicaid sure has problems. One of them, Avik Roy claims, is that it “provides far worse care than people can obtain on their own.”
I know Roy can cite many observational studies that purport to show this. He and I went back and forth on this point last summer. It motivated me to examine studies that use techniques far more likely to tease out the causal effect of Medicaid on health. I documented my findings in many posts. Concluding the series, I wrote,
My take-away from the Medicaid-IV literature review is: there is no credible evidence that Medicaid results in worse or equivalent health outcomes as being uninsured. That is, Medicaid improves health. It certainly doesn’t improve health as much as private insurance, but the credible evidence to date–that using sound techniques that can control for the self-selection into the program–strongly suggests Medicaid is better for health than no insurance at all.
There are observational studies that purport to reveal otherwise, that Medicaid coverage is worse or no better than being uninsured. One cannot draw such conclusions from such studies if they do not control for the unobservable factors that drive Medicaid enrollment. Causal inference requires appropriate techniques. Even a regression with lots of controls, even propensity score analysis, is insufficient in this area of study.
Finally, none of this means Medicaid is a program without flaws. It is badly in need of reform. […] So long as they’re evidence-based, I’m not opposed to adjustments in the design of Medicaid to increase the value of care delivered to the population that relies on it.
However, what we should not do is fool ourselves into thinking Medicaid is not capable of improving health. Based on high-quality evidence to date, it is and it has.
