Medicaid is not a welfare magnet

 

A recent study generated by two Harvard scholars and published in Health Affairs concludes that law-maker anxiety regarding the “welfare magnet” hypothesis—which projects that states which expand their Medicaid programs will open themselves to an undesirable influx of poor people from surrounding states—is unfounded.

To test the hypothesis, study authors used data from the Current Population Survey (CPS) between the years of 1998-2012 to scrutinize the movements of low-income people before and after recent expansions of Medicaid in Arizona, Maine, Massachusetts, and New York. The population under study was 19-64 year olds living at less than 200% of the federal poverty level. To serve as a control, the authors selected states that had not undergone the expansion but which were similar to the expansion states in terms of geographic and demographic characteristics: New Mexico for Nevada and Arizona, Pennsylvania for New York, New Hampshire for Maine, and Connecticut and Rhode Island for Massachusetts. The primary outcome measures were “in-migration”—the migrations of people into control or expansion states—and “out-migration”—the movement of people out of a control or expansion state. The CPS asked respondents for their main reason for moving and lists “health reasons” as an option, but respondents could choose only one reason for moving. Acknowledging that the reasons for movement of subjects was likely multi-factorial, the authors chose migration for any reason as a primary outcome, and movement for “health reasons” for sensitivity analysis.

The primary sample consisted of 62,737 people. In both expansion and control states, the changes in in-migration and out-migration for five years following the Medicaid expansions were not statistically significant (p=0.10). Likewise, no significant effect of the expansions was found for the secondary outcome, movement for “health reasons.” The only significant finding was that childless adults were 3.48% less likely to live in an expansion state after the policy change.

Commentary

This study is well aligned with much of the “welfare magnet” economics literature, which does not supply sturdy evidence for the migration of low-income people to states with more generous public health insurance.

For lawmakers reading this review the implications are incontrovertible. Do the right thing, stop exercising classism, and expand Medicaid coverage. Offering low-earning people equal access to health care improves their health and therefore their work opportunities, drawing them out of the margins and creating a more robust tax-base.

Schwartz, AL and Sommers, BD. Health Affairs. 2014; 33 (1): 88-94.

by

Megan Doede, RN, MSN, CEN