JLF Triangle Blog

Busting The ObamaCare Myth About Reducing ER Visits

Think ObamaCare is going to save money by reducing costly visits to the emergency room? That’s what the president and ObamaCare supporters tell us.

Not likely, writes JLF’s John Hood.

The biggest problem with the Obamacare/ER theory is that it is testable – andempirically false. We already know from past Medicaid expansions, and from the Massachusetts health reforms that influenced the design of Obamacare, that ER visits don’t fall when previously uninsured people obtained health plans. More often, ER visits rise.

Indeed, a simple perusal of the data shows that Medicaid patients use ERs far more than either privately insured or uninsured people do. Moreover, if you adjust for health status, the privately insured and the uninsured have roughly identical rates of ER usage.


What would be a better, more productive path forward? Hood wrote about that earlier this year.

Create refundable tax credits for individuals to purchase private health plans, including within voluntary purchasing pools (exchanges). But don’t require everyone to buy expensive, federally regulated plans that eliminate accurate risk-based pricing and discriminate against consumer-driven health plans in which patients use saved cash rather than insurance claims to pay for non-catastrophic medical bills.

Set up subsidized high-risk pools for people with expensive preexisting medical conditions. They’ll still pay something for their health care, as everyone should, but won’t be either left outside the market altogether or completely subsidized by forcing young people with little disposable income to buy artificially expensive health plans or pay punitive taxes.

Treat Medicaid as a safety-net program for poor and severely disabled people only, not as a vehicle for gradual adoption of a single-payer plan. Convert the program into block grants for states, so they can use competitive contracting and patient incentives to deliver necessary services more efficiently. In return, require states to make all people with poverty-level incomes eligible for Medicaid subsidy (although the subsidy might be used to enter the private market rather than restricted only to the government plan).

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