THE OREGON HEALTH INSURANCE EXPERIMENT: EVIDENCE FROM THE FIRST YEAR

Abstract

In 2008, a group of uninsured low-income adults in Oregon was selected by lottery to be given the chance to apply for Medicaid. This lottery provides an opportunity to gauge the effects of expanding access to public health insurance on the health care use, financial strain, and health of low-income adults using a randomized controlled design. In the year after random assignment, the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected. We find that in this first year, the treatment group had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations), lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported physical and mental health than the control group.

Figure 1. Distribution of Out-of-Pocket Medical Expenses, Last Six Months (Survey Data)

Panel A shows the distribution of out-of-pocket medical spending for controls, and the estimated distribution for treatments through the 95th quantile; the estimated distribution for treatments is the control distribution added to the beta on LOTTERY from the quantile estimation of the reduced-form equation (1). Panel B plots the quantile estimates from equation (1) (along with their 95% confidence interval) starting from the smallest quantile that is nonzero in either the treatment or control distribution through the 95th quantile. The confidence intervals are calculated based on 500 bootstraps clustered on household. Data are from the sample of survey responders (N = 24,012); all results use survey weights. Quantile estimation of equation (1) includes household size dummies, survey wave dummies, and the interaction of the two.