The Affordable Care Act was adopted, President Barack Obama and his supporters said, because it would reduce the number of uninsured Americans and their reliance on hospital emergency rooms for medical care.

But a study out of Oregon indicates that expanding health insurance coverage may have the opposite effect and increase ER visits substantially.

Six years ago, the city of Portland, Oregon, provided Medicaid coverage to thousands of low-income people who previously were uninsured. These individuals proceeded to use ERs more than ever before—by 40%, according to academics who compared the newly insured with other Portlanders who remained without coverage.

The increase was apparent regardless of when people used the ER or their background.

“The findings cast doubt on the hope that expanded insurance coverage will help rein in emergency room costs just as more than two million people are gaining coverage under the Affordable Care Act,” Sabrina Tavernise wrote for The New York Times.

“And they go against one of the central arguments of the law’s supporters, that extending insurance to large numbers of Americans would reduce emergency room use, and eventually save money,” she added.

This assumption, though, didn’t take into account what the study’s authors said was a basic economic principle: when medical care becomes less expensive, people take advantage of it even more.

In the case of Portland, Medicaid took care of certain out-of-pocket costs the previously uninsured Americans had to pay themselves, making it easier for them to utilize ERs.

If the same thing happens nationally as a result of the new healthcare law, hospitals could really be in trouble, considering that as many as 25 million uninsured Americans may gain coverage.

But the Obama White House insists such an outcome for ERs won’t happen. Spokeswoman Tara McGuinness dismissed the findings of the study, claiming its timeframe (18 months) was too short to show that ER use will decline in time. Indeed, for many uninsured people, the emergency room is almost their only experience with formal health care.

-Noel Brinkerhoff

To Learn More:

Emergency Visits Seen Increasing With Health Law (by Sabrina Tavernise, New York Times)

Study: Having Medicaid Increases Emergency Room Visits (MIT Media Relations)

Medicaid Increases Emergency-Department Use: Evidence from Oregon's Health Insurance Experiment (by Sarah L. Taubman, Heidi L. Allen, Bill J. Wright, Katherine Baicker and Amy N. Finkelstein; Science) (abstract)

Most Americans Don’t Understand Affordable Care Act (by Noel Brinkerhoff, AllGov)