How Bad Is Care under Medicaid?

In my previous post I argued that the Affordable Care Act will make it harder for Medicaid enrollees to access care, largely due to an increase in the demand for medical services from the previously uninsured. In this post I review studies which suggest that there is a severe quality problem in Medicaid. (More information can be found in chapter 15 of my Independent Institute book, Priceless: Curing the Healthcare Crisis.)

Here are some studies identified by American Enterprise Institute scholar Scott Gottlieb[1]:

  • A study published in the medical journal Cancer found that Medicaid patients and people lacking any health insurance were both 50 percent more likely to die when compared with privately insured patients.[2]
  • A study published in the Annals of­ Surgery ­found that being on Medicaid was associated with the longest length of hospital stay, the highest total hospital costs and the highest risk of death.[3]
  • A study published in the American­ Journal­ of­ Cardiology found that Medicaid patients were more than twice as likely to have a major subsequent heart attack after angioplasty, compared with patients who had no health insurance at all.[4]
  • A study of patients undergoing lung transplants for pulmonary diseases, published in the Journal­ of Heart­ and­ Lung ­Transplantation, found that Medicaid patients were 8.1 percent less likely to survive ten years after the surgery than their privately insured and uninsured counterparts.[5]In each of these studies, researchers controlled for the factors that can increase poor health outcomes in Medicaid patients. Almost everyone agrees that Medicaid is not as good as private insurance. A more contentious issue is whether Medicaid is better than no insurance at all.

Here are some additional studies identified by Forbes health blogger, Avik Roy[6]:

  • A University of Virginia study found that individuals enrolled in Medicaid are almost twice as likely to die after surgery as privately insured patients, and about one-eighth more likely to die than the uninsured.[7]
  • A study published in the Journal­ of ­the National­ Cancer­ Institute found that Florida Medicaid patients were 6 percent more likely to be diagnosed with prostate cancer at less treatable, later stages than the uninsured. Medicaid enrollees were nearly one-third (31 percent) more likely to be diagnosed with late-stage breast cancer and 81 percent more likely to be diagnosed with melanoma at a late stage. (Medicaid patients did outperform the uninsured on late-stage colon cancer.)[8]
  • A study in the journal Cancer found that the mortality rate for Medicaid patients undergoing surgery for colon cancer was more than three times as high as for the privately insured and more than one-fourth higher than for the uninsured.[9]
  • A study in the Journal­ of­ Vascular­ Surgery found that Medicaid patients treated for vascular problems, including plaque in their carotid (neck) arteries that pump blood to the brain and obstructions in the blood vessels in their legs, fared worse than did the uninsured (however, the uninsured with abdominal aneurysms fared worse than Medicaid patients).[10]

With respect to cancer care, it is unclear that Medicaid matters very much.[11] After reviewing the literature, Roy concludes that Medicaid patients do no better and sometimes worse than the uninsured.[12]

Health economist Austin Frakt takes issue with these studies, claiming that Medicaid and non-Medicaid populations are fundamentally different, even after adjusting for race, income, and other socioeconomic factors.[13] That claim seems improbable—at least at the margin—however, in light of the heavy ping-pong migration of people in and out of Medicaid eligibility.[14] Put another way, people who stay enrolled in Medicaid continuously probably are different from people who never enroll. But the most interesting group is the group that migrates back and forth.

Frakt points to some studies finding that Medicaid makes a positive difference over being uninsured.[15] But the results would probably have been just as good or better if we spent the money giving free care to vulnerable populations. Moreover, even with their Medicaid cards, enrollees turn to emergency rooms for their care twice as often as the privately insured and the uninsured.[16]

A RAND report on expanding Medicaid coverage in Oregon turned up some positive effects.[17] The Oregon Health Insurance Experiment found that those with Medicaid were one-third more likely to see a doctor, 15 percent more likely to fill a prescription, and 30 percent more likely to experience a hospital stay. Very poor and sick individuals enrolled in the program also reported that having Medicaid insurance made them feel healthier. However, economist Robin Hanson points out that about two-thirds of these effects occurred after being accepted into the program, before any care was actually received.[18]

Next we will look at waste in Medicaid.


  1. Scott Gottlieb, “Medicaid Is Worse Than No Coverage at All,” Wall Street­ Journal, March 10, 2011,
  2. Joseph Kwok et al., “The Impact of Health Insurance Status on the Survival of Patients with Head and Neck Cancer,” Cancer 116, No. 2, (2010): 476–485.
  3. Damien J. LaPar et al., “Primary Payer Status Affects Mortality for Major Surgical Operations,” Annals ­of­ Surgery­ 252 (2010): 544–555. doi: 10.1097/SLA.0b013e3181e8fd75.
  4. Michael A. Gaglia et al., “Effect of Insurance Type on Adverse Cardiac Events After Percutaneous Coronary Intervention,” American­ Journal ­of ­Cardiology­ 107 (2011): 675–680,
  5. Jeremiah C. Allen et al., “Insurance status is an independent predictor of long-term survival after lung transplantation in the United States,” Journal ­of­ Heart­ and­ Lung­ Transplantation­ 30 (2011): 45–53,
  6. Avik Roy, “Re: The UVa Surgical Outcomes Study,” The ­Agenda­ (blog) July 18, 2010,
  7. Damien J. LaPar, “Primary Payer Status Affects Mortality for Major Surgical Operations,” Annals­ of Surgery ­252 (2010): 544–551, doi: 10.1097.
  8. Richard G. Roetzheim, “Effects of Health Insurance and Race on Early Detection of Cancer,” Journal­ of­ the­ National ­Cancer ­Institute 91 (1999): 1409–1415, doi: 10.1093.
  9. Rachel R. Kelz, “Morbidity and Mortality of Colorectal Carcinoma Surgery Differs by Insurance Status,” Cancer 101 (2004): 2187–2194.
  10. Jeannine K. Giacovelli et al., “Insurance Status Predicts Access to Care and Outcomes of Vascular Disease,” Journal ­of ­Vascular­ Surgery 48 (2008): 905–911, doi: 10.1016.
  11. Michael T. Halpern et al., “Association of insurance status and ethnicity with cancer stage at diagnosis for 12 cancer sites: a retrospective analysis,” Lancet­ Oncology 9 (2008): 222–231. doi:10.1016/S1470-2045(08)70032-9.
  12. Avik Roy, “Re: The UVa Surgical Outcome Study,” National­ Review (Online), July 18, 2010,
  13. Austin Frakt, “Medicaid-IV Summary,” The­ Incidental ­Economist (blog), October 14, 2010,
  14. Benjamin D.Sommers and Sara Rosenbaum, “Issues In Health Reform: How Changes In Eligibility May Move Millions Back And Forth Between Medicaid And Insurance Exchanges,” Health­ Affairs 30 (2010): 228–236. doi: 10.1377/hlthaff.2010.1000.
  15. Austin Frakt, “Medicaid and Health Outcomes Again,” The Incidental­ Economist (blog), March 2, 2011,
  16. Devon Herrick, “Report: Uninsured Emergency Room Use Greatly Exaggerated,” Healthcare News, July 2010,
  17. Amy Finkelstein et al., “The Oregon Health Insurance Experiment: Evidence from the First Year,” NBER Working Paper No. 17190 (2011),
  18. Robin Hanson, “The Oregon Health Insurance Experiment,” Overcoming Bias ­ ­(blog), June 19, 2011,

[Cross-posted at Psychology Today]

John C. Goodman is a Research Fellow at the Independent Institute, President of the Goodman Institute for Public Policy Research, and author of the Independent books, Priceless: Curing the Healthcare Crisis and A Better Choice: Healthcare Solutions for America.
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