Study asserts Medicaid is key to physical and financial health

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In the first large-scale study to assess the impact of Medicaid, researchers say they have showed that health insurance for low-income individuals results in their improved physical, mental and financial health.

This study, which was published by the National Bureau of Economic Research on Thursday, originates in Oregon in 2008. When that state ran out of Medicaid funds, it held a lottery to determine who would be insured. This gave researchers a chance to compare the low-income individuals with and without insurance, the New York Times reported.

Among the results: those with Medicaid were 35% more likely to go to a clinic or see a doctor; 15% more likely to use prescription drugs; and 30% more likely to be admitted to a hospital. They were 25% less likely to have an unpaid bill sent to a collection agency. Such results could mean that those who are poor and have health insurance stay healthier longer, rather than tax healthcare providers, said experts, some of whom considered the research historic.

“It's obviously a really important paper,” said James Smith, an economist at the RAND Corporation, in the Times report. “It is going to be a classic.”

Medicaid is currently bearing the brunt of many states' budget shortfalls, and is the major source of revenue for nursing homes.