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The United States Senate is embroiled in a debate over revamping healthcare, including potential cuts to Medicaid, a free or low-cost insurance program that covers millions of low-income and disabled people. To better understand what’s at stake, Joshua Gottlieb, an economist at the Vancouver School of Economics at the University of British Columbia, talks about the role and value of Medicaid in this Q&A. 

What are the benefits of Medicaid? 

VSE Assistant Professor Joshua Gottlieb

Health care is expensive. And finding the money to pay for it is hardest when you need it most: when sick. Like any traditional insurance contract, Medicaid provides people with the resources they need when they’re most valuable. There is speculation that providing this care might improve health outcomes, but evidence on that benefit is weaker.

What are the potential downsides to Medicaid?  

Most of the financial benefits are captured by health care providers, not the patients who are the intended beneficiaries. Multiple studies find that beneficiaries value Medicaid at much less than its cost. It’s a very expensive program, so that’s a lot of money to spend in a way that the recipients don’t seem to prefer.

What would happen if Medicaid is cut? 

Providers that have been relying on it would likely change how they practice, where they locate, or which patients they target. We could see an increase in unpaid medical debt and perhaps bankruptcies.

Gottlieb and Mark Shepard from Harvard Kennedy School discuss Medicaid research further in an Econofact memo here.