The poverty-reducing effect of Medicaid.

Area of Science:

• Health Economics
• Public Health Policy
• Social Science Research

Background:

• Medicaid is a crucial health insurance program for 54 million Americans.
• Understanding Medicaid's impact on poverty and healthcare expenditure is essential for policy evaluation.

Purpose of the Study:

• To estimate the impact of Medicaid elimination on poverty rates and out-of-pocket medical spending.
• To quantify the number of individuals protected from poverty by Medicaid.

Main Methods:

• Utilized the Census Bureau's Supplemental Poverty Measure, subtracting medical expenses.
• Employed propensity-score matching to simulate counterfactual insurance and expenditure scenarios.
• Stochastically modeled counterfactual medical expenditures for beneficiaries who lose Medicaid coverage.

Main Results:

• Medicaid reduced average out-of-pocket medical spending from $871 to $376 per beneficiary.
• Poverty rates decreased by 1.0% for children, 2.2% for disabled adults, and 0.7% for the elderly.
• Medicaid kept between 2.6 and 3.4 million individuals out of poverty in 2010.

Conclusions:

• Medicaid serves as a significant anti-poverty program, ranking as the third largest in the U.S.
• The program provides substantial financial risk protection against medical expenditures.
• Eliminating Medicaid would likely increase poverty rates and financial burdens for beneficiaries.