Measuring the “timber effect” in health insurance: Massachusetts Institute of Technology

2022 AUG 24 (NewsRx) — By a News Reporter-Staff News Editor at Health Policy and Law Daily – Not everyone who is eligible for health insurance is enrolled. Consider Medicaid, the national insurance program for low-income people. Passing through USabout 14 percent of eligible adults and 7 percent of eligible children are not enrolled in Medicaid.

As it happens, when adults enroll in Medicaid, some of them enroll their eligible children, too. This is an example of “wooden results,” as policy experts call it – in some cases, people eligible for social programs can get out of the woodwork, so to speak, to benefit.

New research led by a IS Economist quantifies this, work Oregon as an example. The study shows that for every nine adults who got Medicaid in Oregon due to a special enrollment lottery, one previously eligible child was added to the Medicaid rolls.

But although the findings show that the effects of timber exist in social insurance, in Oregon the results were not large enough to create serious problems for his Medicaid system, which is funded jointly by the federal and state governments. Most of the eligible children who were not previously enrolled in Medicaid remained unenrolled; only about 6 percent of those who would have registered signed up when the eldest in their family won Oregon lottery.

“We are finding evidence of these trees,” he says Amy Finkelsteinprofessor in MIT’s Department of Economics and co-author of a new paper describing the results. “We reject the idea that these types of spillovers do not happen. On the other hand, in relation to what has been said in the press and in the past about the large effects of wood, more than half of the direct effects… our results are much smaller than what is assumed.”

The paper, “Out of the Woodwork: Enrollment Spillovers in the Oregon Health Insurance Experiment,” is available in American Economic Journal: Financial Policy. The co-authors of this paper are Adam Sacarny PhD ’14, assistant professor at Columbia University Mailman School of Public Health; Katherine BaickerDean and Emmett Dedmon Professor at University of Chicago Harris School of Public Policy; and Finkelstein, John and Jennie S. MacDonald Professor of Economics on IS.

Winning the insurance lottery

To conduct the study, the researchers used data from the 2008 Oregon Health Insurance Experiment, a special project run by the state of Oregon. Adequate funding to allow expansion of Medicaid for low-income, uninsured, Oregon ran a new Medicaid entry lottery, receiving nearly 90,000 applications for 10,000 new slots.

That created the basis for a practical experiment: Because lottery winners and losers do so randomly, experts can compare what happens next to lottery winners and losers to determine the effects of getting health insurance. Finkelstein, Baicker, and others have published several studies based on this Oregon lottery, showing that having Medicaid increases health care utilization, reduces out-of-pocket costs and medical bills, and reduces depression, among other things.

Because the children of the elders who participated in the lottery in Oregon were already eligible for Medicaid, the lottery allowed researchers to ask: If adults get Medicaid, does that cause them to re-enroll their children?

Finkelstein said: “This helped us see what happens to older children who win the lottery. “We were just trying to find out if there was an effect on the children, and how big the effect was.”

The results were real, but subtle and diminished over time. One year after the lottery, the census gap between children from lottery-winning families and lottery-losing families was about one-third of its original size; some adults who won the lottery saw their children’s enrollment expire, while some older children who lost the lottery ended up enrolling in Medicaid.

“The magnitude of the effect is economic and practical, but the effect is short-lived,” says Sacarny.

The findings add to the public debate that took place after the Affordable Care Act (ACA) was signed into law by the President. Barack Obama in 2010. The ACA allowed states to expand Medicaid to certain low-income adults, although many states did not. Some observers have suggested that the impact of the boards on child enrollment could increase the cost to taxpayers of the large Medicaid expansion. Current research suggests that these costs may be low.

As Finkelstein says, however, the current study is only intended to inform the public about the discussion of Medicaid and wood, and to make better decisions about the expansion of insurance.

“Whether you think that children already eligible to enroll in Medicaid when their parents are eligible is an additional benefit or an additional cost of expanding Medicaid for adults depends on your perception of the cost and benefits of public health insurance,” Finkelstein says. Either way, Finkelstein notes, the cost of paying children through Medicaid is four times less than the cost of paying adults.

“In terms of budget, children tend to be less expensive to cover than adults,” says Finkelstein. “They have less money for health care.”

Understanding enrollment barriers

This paper adds to the existing literature on health insurance enrollment barriers and other social programs. There are a variety of reasons why people who are eligible for social media programs may not apply: They may not know they are eligible, they may find the process too difficult, or they may feel that there is a stigma associated with these programs.

Finkelstein also studied the subject. Along with IS financial partners Abhijit Banerjee and Benjamin Olken, among other experts, co-authored a paper last year on efforts to encourage people to sign up for Indonesia’s national health insurance. The study found some benefit from financial support and enrollment support, but no clear benefit from the simple provision of information to the public.

Experts who have studied Medicaid’s social impact offer praise for the study. Sarah Millerassistant professor of business economics and public policy at the University of Michigan Ross School of Business, calls the study “an exciting new analysis from the Oregon Health Insurance Experiment. The experimental design allows us to study in an interesting way how parental Medicaid eligibility affects children’s enrollment. “

Miller also notes that, by identifying one mechanism that can increase the number of new enrollees, this study shows that we have more to learn about why families continue to leave eligible children unenrolled in Medicaid. “They may not move the needle much, but more research is needed to find out why,” he says.

As Sacarny points out, the current study also shows many ways in which randomized trials, like Oregon’s, can be used to extract more information. By considering a valid test, experts can think critically about how to determine the results, and continue to use the test to produce rigorous results.

“This research shows the need to do some secondary studies of standardized tests,” says Sacarny. “What we’re showing here is that when you combine the test with additional information, you can use it to study additional questions, which may be of great economic and social importance.”

The current paper may also be Finkelstein’s last paper based on the 2008 Oregon Health Insurance Experiment; he has co-authored at least eight other papers that examine the effects of Medicaid enrollment on people, a project that has gained a lot of attention and helped raise awareness about health insurance.

“For me, I can run out of time,” says Finkelstein. However, he and his colleagues have created a public access data file so other researchers can mine all the data from it Oregonas well as showing additional features.

This study was supported, among others, by a National Institute on Aging.

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