A recent study has cast doubt on the notion that providing financial assistance to low-income individuals can improve their health outcomes. The study, conducted by a U.S. nonprofit organization, involved providing a monthly allowance of $1,000 to 3,000 low-income recipients for a period of three years, while a control group of 2,000 individuals received a much smaller allowance of $50 per month.
After analyzing the results, researchers found that while the group receiving the larger allowance spent more on healthcare, this increased spending did not translate into better health outcomes. In fact, the study concluded that there were “precise null effects” on various measures of physical and mental health, including access to healthcare, physical activity, and sleep.
This surprised some — at least one major news outlet conflated higher healthcare spending with “better health” — but it shouldn’t have. This finding should not be entirely surprising though, given the results of a similar study conducted in Oregon last decade. When Oregon expanded Medicaid to cover a wider population, researchers found that government-provided health insurance had no measurable impact on physical health outcomes.
The study’s results suggest that poverty and poor health outcomes are complex issues that cannot be solved simply by providing financial assistance. Other factors, such as unstable households, poor health habits, and community environments, also play a significant role in determining health outcomes.
The findings of this study have implications for the design of social welfare programs, including Obamacare, Medicare, and Medicaid. While these programs may provide some benefits, such as protecting individuals from financial shocks, they may not be effective in improving overall health outcomes.
The idea that redistributing wealth can lift people out of poverty and improve their health is a central tenet of many social welfare programs. However, the evidence suggests that this approach may not be as effective as previously thought. Instead, policymakers may need to consider other approaches that address the root causes of poverty and poor health outcomes.
