Alleviating Poverty Doesn’t Come from Slashing Medicaid

Having Medicaid is better than being uninsured—a lot better. But House Budget Committee Chairman Paul Ryan’s recently released report, War on Poverty: 50 Years Late, claims otherwise.

The report, issued by the House Budget Committee, is a critique of the anti-poverty programs initiated by President Lyndon Johnson’s “War on Poverty” initiative 50 years earlier. Medicaid is among the programs with which Ryan finds fault. However, the analysis of Medicaid skews much of the data on the program.

In 2009, the Institute of Medicine published a thorough review of the consequences of being uninsured. Its conclusions match ours: “The evidence shows more clearly than ever that having health insurance is essential for people’s health and well-being.”

Medicaid, the nation’s health insurance program for low-income people, is no exception. Having Medicaid improves enrollee’s health and well-being. States that expand Medicaid will help more of their citizens to lead healthier lives overall.

Here are some of the facts that Ryan’s report ignores or misrepresents.

Medicaid is an insurance program

Ryan’s report asserts that having Medicaid doesn’t improve individuals’ health. That overlooks the fact that Medicaid doesn’t deliver care. Medicaid is an insurance program. It pays doctors, hospitals, or private managed care plans to provide health care to program enrollees. (In 2011, nearly 75 percent of Medicaid enrollees were in private managed care plans.) Being insured is a lot better than not being insured. And for most people with Medicaid, that is the choice: Medicaid or no health insurance.

Being low-income can have negative health consequences

Medicaid, however, is an insurance program for low-income people. And that makes a big difference when you look at health outcomes for the population covered by Medicaid. Being poor in and of itself is associated with a variety of negative health consequences, from having less access to healthful foods to dealing with chronic stress associated with living in poverty.

Many adults who qualified for Medicaid in the past were eligible for Medicaid because they had high health care needs

Before January of this year—when the Affordable Care Act gave states considerable financial incentives to increase Medicaid coverage for adults—in most states, adults under 65 without dependent children didn’t qualify for Medicaid unless they had a disability or were spending a large portion of their assets on medical care. In other words, they had to need a lot of health care to get Medicaid. Parents’ eligibility was often limited to the poorest of the poor. For those over 65, the vast majority of whom qualify for Medicaid do so because they have spent all their assets on health and long-term care costs.

Correlation does not equal causation: understand the big picture

In other words, before the Affordable Care Act, adults who qualified for Medicaid tended to be either extremely poor or in worse health than the general population. Chairman Ryan’s report ignores the fact that Medicaid serves a disadvantaged population, including many who qualify for Medicaid because they have high health care needs.

The report implies that having Medicaid is worsening or causing enrollees’ poor health, but it can only reach that conclusion by missing essential facts. When advocates encounter someone citing statements about Medicaid from Ryan’s report, just counter with the facts and it should become clear: having Medicaid is better than being uninsured.