Avik Roy, writing at the Atlantic, has an interesting post that directly illustrates the concept of “the solution is the problem.” He dives into the research and comes up with some evidence that expansion of Medicaid actually reduces people’s access to health care.
Chapin White of the Center for Studying Health System Change has published an important new paper in Health Services Research, a journal of health economics, which suggests that a critical part of the Affordable Care Act–its expansion of Medicaid coverage to 16 million more Americans–may actually reduce those individuals’ access to health care.
White’s report comes on the heels of numerous studies that show that patients on Medicaid, our national government-run health-care program for the poor, do far worse on health outcomes than do those on private insurance, and in some cases, worse than those with no insurance at all. (For an extremely deep dive into these studies, see my three-part series on the topic.)
Briefly, the post gives a few reasons that are all supported by the most basic rules of economics. First, Medicaid underpays doctors. This is, of course, by necessity, as Medicaid is devastingly expensive, and governments simply cannot keep up with health care demand. The flipside, though, is that doctors who are underpaid are less likely to offer their services. This is simple supply and demand, and it cannot be repealed.
Furthermore, Medicaid expansion does not lead to more doctor visits. The reasoning here is exactly the same, but with some crowding-out effects added in. As state coverage expands, private insurance gets crowded out, and access diminishes because less private insurance and more government payments means more underpayments to doctors. And more underpayments to doctors leads to less service offered by doctors.
In fact, it’s really quite simple. But many in the political classes refuse to look beyond the first step.