Thursday’s NYT has a very important article on the broad benefits of Medicaid for the poor.

What happened was this.  Oregon had some spare Medicaid money, but it was only enough for 10,000 people.  So they allocated the slots at random.  That’s a perfect natural randomized experiment.

National Bureau for Economic Research did a study, and here is the abstract:

In 2008, a group of uninsured low-income adults in Oregon was selected by lottery to be given the chance to apply for Medicaid. This lottery provides a unique opportunity to gauge the effects of expanding access to public health insurance on the health care use, financial strain, and health of low-income adults using a randomized controlled design. In the year after random assignment, the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected. We find that in this first year, the treatment group had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations), lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported physical and mental health than the control group.

Some quotes from the NYT story:

The study found that those with insurance were 25 percent less likely to have an unpaid bill sent to a collection agency and were 40 percent less likely to borrow money or fail to pay other bills because they had to pay medical bills.

Dr. Finkelstein said she had thought that the people were so poor to begin with that they just did not spend very much out of pocket on medical care when they did not have insurance. “Yet look at the results,” she said.

Dr. Baicker interviewed people for Part 2 of the study and was impressed by what she heard.

“Being uninsured is incredibly stressful from a financial perspective, a psychological perspective, a physical perspective,” she said. “It is a huge relief to people not to have to worry about it day in and day out.”

The study is here (costs $5, with exceptions for federal government, journalists, and residents of developing countries).  The developing country exception is a nice idea.