The human cost of cutting Medicaid

House Republicans have passed a budget plan that would cut federal spending by $880 billion over ten years. Experts agree that there is no way to reduce spending this much without cutting Medicaid. Less federal Medicaid spending would force drastic reductions in health insurance coverage, as many states, encumbered by binding requirements to balance their budgets, would be forced to reverse course on the Affordable Care Act (ACA) expansion of Medicaid or restrict access in other ways to avoid politically ruinous tax increases.

Some who are pushing for these cuts think little would be lost, as they have long claimed that Medicaid does not actually improve enrollees’ health.

At one time, it was hard to refute this claim, as few high-quality studies established a causal link between health insurance and health. Many studies showed that people with health insurance were healthier than people without it. But this is only suggestive of a connection, as those with health insurance, on average, have higher incomes, more education, and better jobs, which are also associated with good health. More than 20 years ago, in fact, one of us published an essay concluding that the evidence on the topic was weak.

The research landscape now features multiple rigorous studies that show what most people would have regarded as common sense: expanded health insurance coverage improves health. In a new article, we reviewed analyses focusing on the relationship between health insurance and mortality, including several recent studies on Medicaid.

For example, one study shows that Medicaid expansion under the ACA led to a statistically significant and economically meaningful reduction in mortality. If all states had expanded their Medicaid programs in 2014, more than 15,000 deaths could have been avoided between 2014 and 2017. Other studies using different data and methods come to similar conclusions.

ACA Marketplace coverage has similar effects. In 2017, the Internal Revenue Service (IRS) sent information about options for insurance coverage through the ACA Marketplaces to a random sample of households that had been penalized for failing to have health insurance coverage in the past year, which led some to enroll in coverage. Among adults ages 45 to 64 who received those letters, mortality fell relative to those who did not get the letters.

Medicaid’s critics ignore this evidence. Instead, they point to an older study of Oregon’s Medicaid program that found no health benefits from the program. Yet they fail to mention that this study was too small to have found an effect on mortality: around one-fiftieth the size of the 2017 IRS study. They also fail to mention that the Oregon study showed Medicaid improves access to health care, diagnosis and treatment of depression, and financial well-being, which several other studies have also shown.

The proposed cuts will mostly affect adults, but children, who represent roughly half of all Medicaid enrollees, will lose coverage as well. During Donald Trump’s first term, administrative changes led to a decline in insurance coverage for children, even though eligibility rules for children did not change. Medicaid coverage improves children’s health at birth, and coverage in childhood and adolescence leads to better health and economic outcomes later in life. Furthermore, women covered by Medicaid as infants have better birth outcomes when they become mothers.

An informed, evidence-based debate on the merits of Medicaid and how it might be improved should always be welcome. But the evidence is now clear: Medicaid improves health. Cutting it will cost lives. Those are facts.

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Tom Buchmueller is a visiting fellow at the Center on Health Policy at Brookings.