As Peter Suderman notes in his piece at Hit and Run, this is huge. It knocks the chocks from underneath one of Obamacare's major justifications; we need to expand Medicaid so that the poor can live healthier lives.

But a study just out in the New England Journal of Medicine disputes that notion:

This is huge, and stunning, even for critics of Medicaid: A randomized-controlled study published in the New England Journal of Medicine by a group of nation's top health policy scholars has found that Medicaid has no measurable effect on any of the objectively measured physical health outcomes the study examined.

In its second-year results, the Oregon Health Insurance Experiment, which randomly assigned Medicaid to 10,000 people in Oregon, and compared them with a randomly selected control group, found that those who got Medicaid did not on average have healthier blood pressure, cholesterol levels, or diabetic blood pressure control than those who did not get Medicaid. Those with Medicaid did see some reduction in out of pocket health expenses. They were also less likely to be diagnosed with depression. 

The Medicaid recipients also ended up utilizing a lot more health care--care that has to be paid for--than those who didn't get coverage. But they didn't use the emergency room any less than the control group. 

This study is perhaps the best and most important study of Medicaid's health effects ever conducted, and it has huge implications for public policy--in particular for Obamacare's Medicaid expansion, which is supposed to account for about half of the law's increase in health coverage. Obamacare supporters had used the results from the study's first year, which showed large gains in self-reported health, to argue that the law's expansion of Medicaid was justified. The second-year results significantly complicate that argument.

Can people be taught to use fewer health care resources? Showing up in the emergency room because you have a cough or indigestion is a poor and inefficient way to use health care dollars. It may be true that there aren't a lot of clinics where the poor can go to be examined by a doctor, but going forward, the only way we are truly going to get health care costs and thus insurance premiums under control is to simply use the system less.

That's not going to be easy. But Medicaid reform has to deal with the issues raised by the study and find a way to lower costs.

And we can start by repealing the massive increase in Medicaid recipients that will flood the health care system once Obamacare signs them up.