More than just health benefits

Health insurance has an “enormous” impact on health, happiness and general well-being, a new study has shown.

The study on the impact of randomly granting health insurance to poor Americans in 2008 was conducted by a group of researchers from Harvard University.

A lottery was used to select low-income Oregonians who would apply for Medicaid so they could have more treatment and preventive care than those who remained excluded from government health insurance.

After one year of receiving health benefits, the Medicaid awardees were happier, healthier, and suffering less financial stress.

Researchers say there are several possible contributing factors to this beyond the obvious. Having insurance may encourage people to go to a regular doctor rather than make a trip to the emergency room, which is more costly to the person and to society.

People with health insurance might also seek treatment earlier, possibly saving an expensive hospital stay later. Since stress can contribute to health problems, merely reducing the stress of worrying about being uninsured may be a health benefit in itself.

However, researchers also say there are societal risks to health insurance including rising costs of health coverage if it turns out that the insured person has unnecessary procedures and medical attention that they no longer have to pay for.

There is also something economists call “moral hazard,” where those who are protected against negative consequences, through measures such as medical insurance, might take greater risks than they otherwise would (driving faster, smoking, eating unhealthy foods, etc).

The relative merits and societal impacts of health care have always been hard to measure because the insured usually differ from the uninsured in many crucial ways.

Since most health insurance in America arises through a job, the uninsured are usually unemployed, a group that is more likely to have worse health as researchers say bad health can even lead to job loss.

The Oregon study provided a chance to measure the impact of insurance when it opened a waiting list for 10,000 new spots in the Oregon Health Plan (OHP) Standard, a plan that provides Medicaid insurance to poor adults who do not meet the usual conditions for Medicaid.

Nearly 90,000 people applied for the 10,000 slots, and the state used a lottery to pick the Medicaid recipients.

The researchers followed both lottery winners and ‘losers’ over the following year by matching a sample of lottery applicants to hospital and other administration data and conducting surveys on the health, well-being, and financial circumstance of both groups.

Do you have health insurance? If so, do you feel noticeably happier? Share your thoughts in the comment box below.