Author Interviews, Cost of Health Care, NEJM / 08.01.2017
Economic Effects of Medicaid Expansion in Michigan
MedicalResearch.com Interview with:
John Z. Ayanian, MD, MPP
Director of the Institute for Healthcare Policy and Innovation and
Alice Hamilton Professor of Medicine
University of Michigan
MedicalResearch.com: What is the background for this study? What are the main findings?
Response: Our study assessed the broad economic impact of Medicaid expansion in Michigan – one of several Republican-led states that have chosen to expand Medicaid under the Affordable Care Act. About 600,000 low-income adults in Michigan are covered through the program, known as the Healthy Michigan Plan, which began in April 2014.
Using an economic modeling tool that is also used to advise the state government for fiscal planning, we found that federal funding for the Healthy Michigan Plan is associated with over 30,000 additional jobs, about $2.3 billion in increased personal income in Michigan, and about $150 million in additional state tax revenue annually. One third of the new jobs are in health care, and 85 percent are in the private sector. The state is also saving $235 million annually that it would have spent on other safety net programs if Medicaid had not been expanded.
Thus, the total economic impact of the Healthy Michigan Plan is generating more than enough funds for the state budget to cover the state’s cost of the program from 2017 through 2021. Beginning in 2017, states are required to cover 5 percent of the costs of care for Medicaid expansion enrollees, and the state share of these costs will rise to 10 percent in 2020. The remaining costs are covered by federal funding.
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