Economics

Insuring Greater Health

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Science  15 Jun 2012:
Vol. 336, Issue 6087, pp. 1362
DOI: 10.1126/science.336.6087.1362-b

What happens when health insurance is given to low-income individuals? Finkelstein et al. report on the 1-year outcomes after the state of Oregon enrolled roughly 10,000 uninsured adults, selected by lottery and with annual incomes of $10,000 or less, in Medicaid. They find, in comparison to those who were not selected, a 15 to 35% greater consumption of health care, as measured by the number of hospital admissions, prescription drugs taken, and outpatient visits, along with a 15 to 60% greater rate of compliance with preventive care, such as testing for blood cholesterol and mammograms. The increased use of medical services was consistent with the observation that the incidence of diabetes, hypertension, asthma, and depression in the people who were eligible for Medicaid but did not win the lottery was twice as high as in the general adult population. Objective measures of changes in physical health await in-person follow-up assessments, but one remarkable finding from the surveys is that the impact of health insurance on subjective well-being, at least in this context, is equivalent to what would be produced by a doubling of one's income.

Q. J. Econ. 127, 10.1093/qje/qjs020 (2012).

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