Medicaid – Donald Marron

Expanding Medicaid Reduces Death Rates

Arizona, Maine, and New York significantly expanded Medicaid coverage in the early 2000s. That expansion appears to have reduced death rates, according to a new study in the New England Journal of Medicine.

Benjamin Sommers, Katherine Baicker, and Arnold Epstein, all of the Harvard School of Public Health, compared mortality in those states to four neighboring states (Nevada and New Mexico; New Hampshire; and Pennsylvania) that didn’t expand Medicaid coverage. They found that mortality fell in the three states that expanded coverage even as it increased in the neighbors:

The authors use the usual battery of statistical techniques to try to tease our whether some other factors, perhaps changing economic fortunes or demographics, might explain the mortality differences. After all that, their best guess is that the reduction in death rates is real: on average, one death was averted each year for every 176 extra adults covered by Medicaid.

The study does have limitations, as the authors carefully note. For example, it relies on mortality data for counties. What you’d really like, of course, are data for individuals, so you could track the impacts of Medicaid enrollment person-by-person.

For further discussion, see this NYT article by Pam Belluck.

More Stimulus Spending Than Originally Projected

Lots of budget news this morning, with the release of the newest projections from the Office of Management and Budget and the Congressional Budget Office.

One headline is that spending on the stimulus will be higher than expected. As reported by Lori Montgomery at the Washington Post (ht EconomistMom):

The $787 billion economic stimulus package President Obama signed earlier this year is likely to cost “tens of billions of dollars” more than expected, helping to drive projections for next year’s budget deficit to $1.5 trillion, White House budget director Peter Orszag told reporters.

With unemployment climbing, costs for a variety of stimulus programs are running higher than anticipated, Orszag said, including expanded unemployment benefits, food stamps and energy grants. In an interview embargoed for release Tuesday morning, Orszag said he could not estimate the overall cost of the package, but he called Republican estimates of $900 billion “slightly high.”

The $900 billion estimate that Peter mentions is reported in this letter from former CBO Director Doug Holtz-Eakin to Republican House Leader John Boehner.

The CBO also addresses this issue in its report (box on pp. 10-11). The box discusses lots of pesky nuances about budget accounting and the timing of payments. Perhaps the most interesting observation, consistent with the OMB quote above, is that:

The higher-than-expected unemployment rate has led CBO to raise its estimates of spending in 2009 for ARRA [i.e., stimulus] provisions that affect unemployment compensation (by $7 billion) and Medicaid (by $1 billion).

In other words, the weaker economy has added $8 billion to stimulus spending in fiscal 2009 alone with, presumably, more to come in fiscal 2010.

These developments further complicate the challenging task of tracking the stimulus.