Source: Bet On It
by Bryan Caplan
“In 2015, Amy Finkelstein, Nathaniel Hendren, and Erzo Luttmer released an NBER working paper called ‘The Value of Medicaid: Interpreting Results from the Oregon Health Insurance Experiment.’ The paper’s results were a slap in the face of Social Desirability Bias — and the authors boldly advertised them right in the abstract: ‘Our baseline estimates of Medicaid’s welfare benefit to recipients per dollar of government spending range from about $0.2 to $0.4, depending on the framework, with at least two-fifths – and as much as four-fifths – of the value of Medicaid coming from a transfer component, as opposed to its ability to move resources across states of the world. ‘Translation: Medicaid drastically fails a cost-benefit test by giving extremely expensive health care to recipients who barely appreciate it. Using standard economic logic, the poor themselves would be far better-off if the government cut the Medicaid budget in half, then handed current recipients the remaining money.” (08/27/25)
https://www.betonit.ai/p/the-value-of-medicaid-the-evolution