This is archived content, for historical reference only.

In 2008, with limited resources to expand its Medicaid program, Oregon determined that a lottery would be the fairest way to choose enrollees. About 90,000 low-income adults applied for 10,000 openings. This overwhelming response allowed researchers to conduct the first randomized, controlled study of insuring previously uninsured adults.

The Oregon Health Insurance Experiment is providing clues to the likely impact of Medicaid expansion under the Affordable Care Act.

• Initial findings from the study, published as a National Bureau of Economic Research (NBER) working paper in July 2011, provided the first look at the Oregon experience after nearly a full year of enrollment. Researchers found that Medicaid coverage in Oregon increased individuals’ health care access and use of services, lowered out-of-pocket costs, reduced medical debt, and improved self-reported health and well-being. They also found that Medicaid coverage did not reduce use of emergency departments, and annual health care expenditures increased by 25%.
• A second round of findings, published by the Oregon Health Study Group in the New England Journal of Medicine in May 2013, provided a look at the Oregon experience after two years. The researchers found that Medicaid coverage increased individuals’ use of health care services, raised rates of diabetes detection and management, lowered rates of depression, and reduced financial strain. However, they also found no significant improvements in measured physical health outcomes in the first two years of Medicaid coverage.
• A third set of findings, published in Science in January 2014, analyzed the impact of Medicaid coverage on emergency department (ED) use. Researchers found that ED use among those who got Medicaid coverage through the Oregon lottery was 40% greater over 18 months relative to the control group. They found increases in ED use across a broad range of visits, conditions, and subgroups, including conditions that may be most readily treatable in primary care settings.

This ongoing research, funded in part by CHCF, continues to advance understanding of the benefits and limitations of Medicaid coverage. The results also underscore the vital importance of finding ways to delivery care more efficiently.

Extrapolating the results of this small Medicaid expansion in Oregon to the very large expansion of Medicaid in California comes with important caveats. The relatively small number of new Medicaid enrollees in Oregon — an increase of less than 2% — means that constraints in the supply of primary care physicians were not a concern. The demographics of the uninsured population are also much different in Oregon than in California, and Medicaid programs differ in every state. For example, whereas Oregon Medicaid pays physicians 81% of Medicare rates on average, physician reimbursement rates in California’s Medicaid program average only 51% of Medicare rates.

The complete New England Journal of Medicine Special Article is available as an External Link, and the NBER working paper is available as a Document Download.