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December 26, 2013

Cycle of Dependence?

Many critics of getting more people the health care they need by expanding Medicaid  fear that it will create a cycle of  dependence where people feel less inclined to pull themselves up by their bootstraps. But those fears are unfounded, and now there’s evidence to prove it.

Side-by-side comparisons from Oregon show that enrolling in Medicaid doesn’t have an impact at all on whether recipients work. That’s one less leg that opponents of Medicaid expansion in Virginia have to stand on.

In 2008, Oregon opened up Medicaid eligibility so that most people under the poverty line could enroll. But the state only had enough money to cover a fraction of the newly eligible. So it  used a random lottery to decide who would get coverage and who wouldn’t.

By creating two distinct, but roughly identical, groups – those who received coverage and those who didn’t – Oregon’s lottery allowed researchers to see the direct results of Medicaid coverage. Researchers had previously looked at changes in the recipients’ use of health care services  and the outcomes. But more recently they’ve studied how Medicaid alters recipient’s participation in the workforce. And … well … it doesn’t.

Medicaid recipients in the study were just as likely to be employed as those who didn’t get coverage. Those who got it also earned just as much as those who didn’t.  

In other words, low-wage earners that benefit from expanded Medicaid don’t choose to live in poverty. In fact, they’re doing everything they can to fight their way out of it.

–Mitchell Cole, Research Assistant

The Commonwealth Institute

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