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The Poverty-Reducing Effect of Medicaid

August 25, 2014 10:00 AM

Medicaid provides health insurance for more than 54 million Americans. In this paper, featured at last year's Fall Research Conference, authors Benjamin D. Sommers and Donald Oellerich use the Census Bureau's supplemental poverty measure to estimate the impact of eliminating the program. Their counterfactual, drawn stochastically from propensity-score-matched individuals without Medicaid, shows that Medicaid beneficiaries would become uninsured or gain other insurance.

The authors find that Medicaid reduces out-of-pocket medical spending by nearly $500 per beneficiary and decreases poverty rates among children, disabled adults, and the elderly. In 2010, Medicaid kept between 2.6 and 3.4 million people out of poverty, making it the United States' third largest antipoverty program.

Download the full paper [PDF]

 

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