New Study of Medicaid, Focusing on Kentucky

University of Kentucky Professor of Economics and Mercatus-affiliated scholar John Garen has a new paper on the growth of Medicaid in Kentucky.  It is an enlightening read.  For one thing, I learned that the latest estimates suggest that Medicaid crowds-out private insurance at the rate of 50 to 60 percent (i.e., 5 to 6 out of every 10 new entrants to the program would have obtained private insurance).  The latest estimate, which looks at crowd-out in long-term care insurance, was obtained by Jeffrey Brown and Amy Finkelstein (incidentally, the latter just coauthored a piece that found Medicaid patients tend to be healthier than those without insurance, other things being equal).

I also learned about a number of reforms that have been shown to reduce costs and/or improve patient satisfaction. For example, Arkansas, New Jersey, and Florida have all received waivers to institute “Cash and Counseling” programs for disabled Medicaid recipients.  Under this type of program, enrollees are given a budget for various personal and household Medicaid services.  Then:

[W]ith guidance from a counselor, [they] can select the type, amount, and vendor of the services they purchase.  In other words, they receive a voucher.  Studies of this program indicate it has resulted in high recipient satisfaction, less fraud, and has saved on the use of expensive institutional care.

Here is one such study of the program.

Here is John’s website.