Insured are happier, but spend more, study finds
By ANNIE LOWREY
The New York Times | June 24,2012
PORTLAND, Ore. — When Wendy Parris shattered her ankle, the emergency room put in an air cast and sent her on her way. Because she had no insurance, doctors did not operate to fix it. A mother of six, Parris hobbled around for four years, pained by the foot, becoming less mobile and gaining weight.
But in 2008, Oregon opened its Medicaid rolls to some working-age adults living in poverty, like Parris. Lacking the money to cover everyone, the state established a lottery, and Parris was one of the 89,824 residents who entered in the hope of winning insurance.
With that lottery, Oregon became a laboratory for studying the effects of extending health insurance to people who previously did not have it. Health economists say the state has become the single best place to study a question at the center of debate in Washington as the Supreme Court prepares to rule, likely next week, on the constitutionality of President Barack Obama’s health care law: What are the costs and benefits of coverage?
In a continuing study, an all-star group of researchers following Parris and tens of thousands of other Oregonians has found that gaining insurance makes people healthier, happier and more financially stable. The insured also spend more on health care, dashing some hopes of preventive-medicine advocates who have argued that coverage can save money — by keeping people out of emergency rooms, for instance. In Oregon, the newly insured spent an average of $778 a year, or 25 percent, more on health care than those who did not win insurance. For the nation, the lesson appears to be a mixed one. Expanded coverage brings large benefits to many people, but it is also more likely to increase a stretched federal government’s long-term budget responsibilities.
The newly insured of Oregon were more likely to describe their health as good, and to say that their health was getting better, according to self-reported data that researchers are now combining with objective measurements. The uninsured reported being in worse physical and mental shape and were less likely to describe themselves as happy. Getting insurance also had powerful financial effects, the study showed. The insured were 25 percent less likely to have an unpaid medical bill sent to a collection agency and 40 percent less likely to borrow money or skip paying other bills in order to cover their medical costs.
“I feel like a different person,” said John Bell, a stay-at-home father who won the insurance lottery. “I was pretty grumpy all the time before.”
Before winning the lottery, Bell filed for bankruptcy after emergency surgery to remove kidney stones left him with a $6,000 bill that he and his wife could not pay, he said. Today, Bell has a primary-care physician who has encouraged him to lose weight and improve his diet to help control his diabetes.
The Oregon Health Study has won academic attention both because of the pedigree of the researchers — including Joseph P. Newhouse, who designed the renowned RAND Health Insurance Experiment in the 1970s, and Amy Finkelstein, the most recent winner of the John Bates Clark Medal, an economic prize considered second only to the Nobel — and the distinct nature of the state’s health-insurance lottery. By assigning coverage randomly, Oregon gave researchers more confidence that they had teased out the true effects of insurance, and had not been fooled by other differences between the insured and the uninsured.
“The study put to rest two incorrect arguments that persisted because of an absence of evidence,” said Katherine Baicker, a Harvard economist who worked on the study and served as an economic adviser to President George W. Bush.
“The first is that Medicaid doesn’t do anything for people, because it’s bad insurance or because the uninsured have other ways of getting care,” Baicker said. “The second is that Medicaid coverage saves money” by increasing preventive care, for instance.
“It’s up to society to determine whether it’s worth the cost,” she added.
Discussions with 17 insured and uninsured participants in the Oregon Health Study illuminated how coverage changed and did not change their lives. Many described poverty and its attending problems, not health care, as their major challenge. (The Affordable Care Act, Obama’s health care law, requires states, in 2014, to extend Medicaid eligibility to all adults within 133 percent of the poverty line, which is currently $11,170 for a household of one and $23,050 for a household of four.) A handful said that they were not overly bothered by their lack of coverage, or that winning Medicaid had not really had much of an effect.
But many, including Parris and Bell, said that Medicaid had made a significant — even transformative — difference in their lives.
Parris got surgery for her foot, and additional care. She is also getting spinal surgery. Doctors have helped her address her depression, triggered by the death of one of her children. Her weight has come back down, and her mobility is far better. She said that she felt she was a better parent, and that her mood had improved, although she still had problems paying the bills.
“It saved my life,” she said.
Most of the uninsured described their lack of coverage as a profound problem.
For instance, a year ago, Samantha Kious, a hair stylist, went to Planned Parenthood to seek birth control medication to manage her polycystic ovary syndrome, a common hormonal imbalance.
Kious, 24, who also suffers from depression and Crohn’s disease, an inflammatory bowel condition, makes only $1,000 to $1,200 a month and cannot afford insurance. The clinic performed some tests and prescribed Kious the pills. But they also told her that she had Stage 2 cervical cancer. As of now, the condition remains untreated. She and her boyfriend even considered getting pregnant so that she would automatically qualify for Medicaid.
“It’s scary for me, having cancer and knowing I can’t do anything about it,” said Kious, her hair in an elaborate plait. “It’s an I-don’t-know-when-my-next-meal-will-be sort of thing. It’s really difficult because health problems make you scared and emotional.”
Interviews with study participants showed that the insured and the uninsured got health care in significantly different ways. Lottery winners tended to have a primary care physician who saw them regularly and helped them navigate the health care system. In contrast, few of the uninsured saw doctors regularly, and none said that they had regular health examinations.
Some sought care from free clinics or charity hospital programs. But they said it was difficult to know when and where such programs were available and sometimes how to use them. You might have to bring certain paperwork to prove your poverty, for instance. Child care could be a problem. You might show up on the wrong day.
“You’ve got to be clearheaded” to find free care, said Cynthia Robbins, 57, who is unemployed and won insurance.
When she was uninsured she neglected the effects of her diabetes — including problems with circulation in her feet that resulted in the amputation of a toe.
“When you’re in the middle of a crisis, you’re not going to be filling out forms,” Robbins said.
The uninsured described borrowing medication from family members and friends, taking it every other day, and asking doctors to diagnose multiple conditions and write multiple prescriptions on a single visit. The insured said they had largely abandoned such strategies.
Nearly all of the uninsured also described how avoiding doctors to save money resulted in trips to the emergency room. (Unnecessary or preventable emergency room use costs some $38 billion a year, researchers estimate.)
“I think the ER doctors now know me by name,” said Kious, the hairdresser. “But that’s the only thing you can do. You wait until you can’t bear it anymore. I’ve been in the hospital three times for a kidney infection so severe you just have to get it treated.”
Study participants also described coverage as no magic bullet for a person living under or near the poverty line, but as something that tended to make life easier.
“It’s a weight off your shoulders, when you feel like you can go to the doctor like everybody else,” said Robin Baros, 51, who won insurance. “And when you have insurance, you feel healthier. You want to take care of yourself. You’ve got your regular visits that you can go to.”
Not having insurance “affects your whole life,” said Christine Toman, 61, who has a chronic pulmonary condition and hepatitis C and did not win coverage.
“I went to work. I paid my bills,” she said. “And now I feel like a hopeless, hopeless old woman that’s in the way, and it’s sad to feel like that. I’d like to die with some pride.”
Toman, in a husky voice and a soft wheeze as she labored to breathe, said that she occasionally goes to the emergency room when her conditions became acute. But she generally just forgoes care.