Does Medicare Save Lives?

Within weeks of becoming eligible for Medicare, the landscape for insurance-coverage changes dramatically: Nearly 80 percent of the eligible population enrolls almost immediately and 75 percent of those previously uninsured gain coverage.

Three economists (David Card of UC Berkeley, Carlos Dobkin of UC Santa Cruz, and Nicole Maestas of RAND) recently looked at this pivotal point in health care coverage to identify any effects that Medicare may have on saving lives.

Even though the Medicare program pays for almost 20 percent of health care costs in the United States, learning something about its effectiveness has not been easy. The only thing we know for sure is that the use of medical care increases once people become eligible for Medicare.

In their study, Card, Dobkin and Maestas looked at 400,000 cases of emergency room admissions that needed immediate hospitalization.

The trio confirmed that the number of procedures performed did increase slightly for those who had Medicare coverage and they also found a small rise in hospital charges (about 4 percent). More importantly, they found a sizable drop in death rates -- about 20 percent -- once people became eligible for Medicare.

While the easy conclusion might be that this Medicare effect was driven by the uninsured population who now had coverage, the researchers say that the drop in death rates was too big and widespread among the entire population in their sample. They argue that the drop is more likely related to fewer restrictions imposed by Medicare than with private insurance or Medicaid, which then lead to more -- possibly higher quality -- procedures.

It's important to note that the results don't say anything about those on Medicare who are treated for non-dire illnesses. It's quite possible, the researchers say, that there might be no benefit to mortality rates for this group.

Still, given the findings, does it make sense to extend Medicare coverage to people who need immediate medical care, even if they are already insured since they will likely receive better care with little extra added cost?

(Related: This recent medical study found that uninsured people 55 and older see a large health gain after enrolling in Medicare at 65.)