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A Project of The Annenberg Public Policy Center

Distortions in the Medicaid Battle

Conservative critics of the Affordable Care Act are misrepresenting a study examining the health benefits of expanding Medicaid to cover more low-income people.

In Arizona, a group calling itself American Commitment has launched a series of 30-second Web ads claiming that “a recent study shows that Medicaid doesn’t even improve physical health.” But that’s a distortion. The study, released May 1 and published in the New England Journal of Medicine, actually found several positive benefits. And it measured only three health indicators over a two-year period.

American Commitment first launched Web ads on May 10 targeting five Arizona state Republican senators — Adam Driggs, Bob Worsley, John McComish, Steve Pierce and Rich Crandall — urging them to reject Gov. Jan Brewer’s proposal to expand the state’s Medicaid rolls with the help of federal dollars provided by President Obama’s health care law.

After the Senate, with the support of all five of those lawmakers, approved the Medicaid expansion as part of a 2014 budget bill on May 16, American Commitment targeted state House members with its ads, such as the one below telling viewers to call Rep. Tom Forese and tell him to “fight the Obamacare Medicaid expansion.”

The ads display a partial quote that distorts what the New England Journal of Medicine report says. The text on the screen says, “Medicaid coverage generated NO significant improvements in measured physical health.” But that cuts out the stipulation that no improvements were found in the first two years, and the fact that the study did find some benefits.

The full quote is below, with the part used in the video highlighted.

NEJM Study: This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.

Beyond that, the study measured only three indicators of physical health.

NEJM Study: We found that insurance led to increased access to and utilization of health care, substantial improvements in mental health, and reductions in financial strain, but we did not observe reductions in measured blood-pressure, cholesterol, or glycated hemoglobin levels [used to monitor diabetes].

In other words, the findings were mixed.

The study found that providing Medicaid coverage didn’t produce any significant improvement in the three selected indicators of physical health, at least during the two-year span covered. But that’s not quite the same as proving that coverage “doesn’t even improve physical health” generally. There could be other improvements that the study didn’t attempt to measure, or that could show up once patients are covered for longer than two years. The study said that “the effects of insurance in the longer run may differ.”

But more important, the ad twists the facts by ignoring findings of “substantial improvements in mental health,” improvements in feelings of physical and financial well-being, and other benefits.

One of the study’s authors, Jonathan Gruber of the Massachusetts Institute of Technology, commented on the ad at our request. “There is nothing factually inaccurate,” he wrote to us by email. “But the spot represents the negative findings of the study without talking about the positive findings: the fact that we find enormous improvements in mental health and in financial security.” (Gruber was a paid consultant to the Obama administration and Gov. Mitt Romney’s administration in Massachusetts to help both develop health care overhaul plans.)

Another author of the study, Katherine Baicker, a former member of President George W. Bush’s Council of Economic Advisers, told the publication Healthcare Finance News that the study “should make people question whether we can expect to see substantial improvements in physical health among people newly covered by Medicaid within two years.” But she also cautioned against generalizing the results nationally. “Our study was done in Oregon, just one state, and we looked over only two years and the effects that you might expect to see from insuring 10,000 people, which is a relatively small share of the population, might be quite different from what you might expect if you were to suddenly insure millions of more people,” Baicker said.

The study also found that “Medicaid coverage resulted in an increase in the number of prescription drugs received and office visits made in the previous year.” It found that “Medicaid coverage led to an increase in the proportion of people who reported that their health was the same or better as compared with their health 1 year previously.” In other words, those on Medicaid were more likely to say that they felt healthier, even if the three chosen indicators (blood pressure, cholesterol and glycated hemoglobin) showed no significant improvement.

The landmark study covers data for 6,387 adults who were randomly selected to be able to apply for Medicaid coverage under a special lottery run by the state of Oregon in 2008, and compares that with data for 5,842 adults who were not selected to receive coverage. The authors call it “The Oregon Experiment.”

The Battle in Arizona

The legislative effort to expand Medicaid under the Affordable Care Act has been tense and controversial in Arizona. Brewer, like many other Republican governors, opposed enactment of the Affordable Care Act and sought its repeal. But now she is pressing to expand Medicaid, even vowing to veto all bills that cross her desk “until we see resolution of the two most pressing issues facing us: adoption of a Fiscal 2014 State Budget and plan for Medicaid,” as she said in a recent letter to the Senate president.

The ACA expands Medicaid to include those earning up to 138 percent of the federal poverty level, which is $15,856 a year for 2013 for an individual and $32,499 for a family of four. But the Supreme Court’s June 2012 ruling gave states the option not to expand Medicaid. As of May 28, 29 states, including the District of Columbia, supported the expansion, 20 are opposed, and two are still considering it, according to the Kaiser Family Foundation.

Arizona currently offers Medicaid to those earning up to 100 percent of the federal poverty level, which is $11,490 for 2013. Under the ACA, the federal government will pay 100 percent of the costs for those who are newly eligible through 2016, and 90 percent of the costs by 2020.

The boost in Medicaid enrollment in Arizona would be significant if the law passes. The state froze enrollment for adults without children in 2011, leaving an estimated 240,000 uninsured, according to Brewer and the state Medicaid agency. They say an additional 63,000 who currently have Medicaid coverage stand to lose it if the state doesn’t pass the expansion legislation, and another 57,000 would be added under the expansion. Brewer estimates the expansion would mean $4.1 billion in federal dollars for the state for 2014 to 2016.

— Brooks Jackson and Lori Robertson