26 Jun 2017

Krugman on the Oregon Medicaid Experiment

Krugman 4 Comments

Since health insurance “reform” is back in the news, I’ve been boning up on stuff, including the famous Oregon Medicaid experiment. (The Wikipedia article on it is surprisingly good, in case you never really figured out what everybody was talking about a few years ago.)

To make sure I wasn’t getting duped by right wingers, I went back and reviewed what “the other side” said. And this response from Krugman is pretty funny, in how slippery it is:

Busy day, no additional blogging until much later. But you should be reading The Incidental Economist on the Oregon Medicaid study that’s creating a lot of fuss today. Basically, budget woes forced Oregon to allocate Medicaid access by lottery, giving a rare randomized experiment. Those who got Medicaid suffered much less financial distress and less depression; they received more preventive care; but on some (not all dimensions) their health wasn’t significantly better than those who lost out in the lottery.

Somehow, conservatives think this is a big win for their opposition to universal health insurance. Why? What it suggests is that the health benefits of ANY kind of health insurance are somewhat hard to identify over a two year period; so, are you about to give up your own insurance, or is your best bet that having that insurance is still a very good idea? And the financial benefits are a big part of that! Since you are going to treat your illnesses, better not to bankrupt yourself in the process, right?

Above all, you should bear in mind that if health insurance is a good idea — and you are nuts if you let this study persuade you otherwise — Medicaid is cheaper than private insurance. So where is the downside?
[Bold added.]

It’s that last part that I put in bold that I find so funny/slippery. According to Krugman’s own logic, he himself should be willing to give up his current health insurance plan, in exchange for the same deal that people on Medicaid get. Would Krugman be willing to do that?

I’m assuming the answer is “no,” and then when Krugman explained why, he would see that his main point in his post unravels.

4 Responses to “Krugman on the Oregon Medicaid Experiment”

  1. Tel says:

    Medicaid is cheaper than private insurance.

    Those death panels are really good value!

    But one of the big differences in cost is that the so called “private” insurers have higher administrative costs. As Bob’s book explains, private companies are not full of stupid people who love to do things by the least efficient method; they are full of people figuring out how to deal with the massive government regulation they need to comply with, which in turn drives up their costs.

    So remember how the government run VA healthcare used secret waiting lists, while at the same time claiming no one was on a waiting list? Remember how the vets who had fought for their country and survived enemy fire ended up dead, waiting for their government to get around to looking at some treatable ailment? Yeah… I remember… but who got their backside kicked for that? I can’t seem to recall any consequences.

    If that had happened with a private company, there would have been serious consequences… and that’s how governments actually save costs, by not providing much service.

  2. The Original CC says:

    I think I might be willing to switch to Medicaid (esp. if I can pocket the difference in price!). I have private insurance through an employer. I think the employer believes it’s good insurance, but the copays are high, there’s always some unreimbursed part of the visit that I get billed for (regardless of the fact that neither the doctor nor I had any idea what it would cost or even if it would be covered), and even when stuff is covered, it seems that I’m constantly battling the insurance company.

    Meanwhile, I believe that Medicaid coverage is actually really good in this state. So I don’t have enough information to decide, but it’s not a slam-dunk either way for me.

    PK doesn’t come across to me as unreasonable here.

  3. md.monirul islam says:

    Somehow , conservatives think· this is a big· win· for their opposition· to universal health insurance· . Why ? What it suggests is that the health benefits of ANY kind· of health insurance· are somewhat hard· to identify· over a two· year period; so , are you about to give· up your own insurance· , or is your best bet that having that insurance· is still a very good· idea· ? And the financial benefits are a big· part· of that ! Since you are going to treat· your illnesses , better not to bankrupt yourself in the process· , right· ?thank you.

    • Bob Murphy says:

      (1) I’m not a conservative.

      (2) This is a study about Medicaid. There are studies showing private coverage helps (mildly) improve health outcomes. So no, this doesn’t “suggest” problems with identifying benefits from any insurance, it focuses on Medicaid.

      (3) When it initially looked like the Oregon project was a slum-dunk success, Ezra Klein called it “the gold standard” and wanted a bunch of other studies based on this design. Not a word about its limitations or that we really can’t draw too much of conclusions from it. I wonder why all of a sudden the Oregon study is not really informative, after the full data came in and it showed no statistically significant physical health benefits?

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