A few days ago, I wrote an article suggesting that an effective post-Obamacare reform would be difficult to bring about as long as anti-Obamacare reformers (especially yours truly) stuck to the simple argument that being on Medicaid is as bad (or even worse) than being uninsured. The reason is that the Medicaid beneficiary does not sign up for a national health plan called Medicaid. Instead, he is increasingly likely to sign up for a managed-care plan that contracts with the state to provide Medicaid benefits. Readers retorted that the nail in Medicaid’s coffin was driven by the Oregon Medicaid experiment, a randomized, controlled trial (sometimes described as “gold standard” which it could not have been, because it was not double blinded). This blog has agreed that the Oregon Medicaid experiment demonstrated the ineffectiveness of Oregon’s Medicaid expansion. However, I am not sure that leads to a general theory of Medicaid’s overall ineffectiveness.
According to the Kaiser Family Foundation’s statehealthfacts.org, 98.2 percent of Oregon’s Medicaid dependents were in managed-care plans in 2011. Oregon ranked sixth in the proportion of Medicaid dependents enrolled in managed care, instead of fee-for-service. Over half a million were enrolled in prepaid ambulatory health plans (which do not cover hospitalization), and a similar number were enrolled in prepaid inpatient health plans. Somewhat fewer than half a million were enrolled in 13 different comprehensive managed-care plans, according to the Kaiser Family Foundation. Small numbers were enrolled in other types of plan, including commercial HMOs. None of this is reflected in the research on Oregon’s Medicaid lottery, which refers simply to an undifferentiated Medicaid, as if it were a health plan, instead of a benefit. So, we have no idea which health plans the lottery winners chose (if they had a choice). Post-Obamacare reformers have no trouble differentiating between Medicare Advantage plans and Medicare fee-for-service. The reason is that we want to erase the segregation of retired people from working-age people, and this requires a large proportion of Medicare beneficiaries to be enrolled in Medicare Advantage plans (or something similar), before that reform. The same is true of Medicaid. Some Medicaid managed-care organizations have launched Obamacare exchange plans, in anticipation of dependents churning between the two markets. It makes sense: According to Optum Health, the average period an adult is covered by Medicaid is only 8.5 months a year. A large number of Medicaid beneficiaries will surely spend some time in exchange plans, as they work for a few months in low-wage jobs. These Medicaid managed-care organizations want dependents to maintain the same coverage during periods of employment. That is a reasonable goal, and one that the next round of health reform should keep in mind.