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Member Research & Reports

Member Research & Reports

Medicaid Expansion Boosts Michigan’s Economy and Will More Than Pay for Itself, Michigan Study Finds

A new study from SPH professors Dr. John Z. Ayanian, and Dr. Helen Levy, finds that Michigan’s Medicaid expansion has improved the state’s economy and will likely continue to do so for the next five years. Their projections indicate that the program is essentially paying for itself through its economic impact and this effect will continue, even as costs increase each year, until 2021.

[Photo: Dr. John Z. Ayanian and Dr. Helen Levy]

Analysis of the economic impact of the expansions shows that the benefits go beyond the 600,000 low-income Michigan residents who are now covered by Medicaid, and has an even broader impact on the state’s economy by creating more than 30,000 new jobs every year, resulting in close to $2.3 million more in spending power for Michiganders.

As Dr. Levy puts it, “The Healthy Michigan Plan has not only covered more than 600,000 Michiganders – most of whom had been uninsured – it has also lightened the economic load on the state, on families and businesses, and on health care providers. Federal spending through Medicaid gives a big boost to the state’s economy.”

The state is also saving money by not having to pay for costly safety-net programs, which it would have been required to do had Michigan not elected to expand Medicaid in 2014.

Also included in the analysis are the hospitals and other providers who had previously been absorbing much of the costs of providing care to uninsured people. These dollars can now be spent in others ways by hospitals.

Dr. Ayanian says of their findings: “We hope that our findings will provide needed evidence to Michigan lawmakers as they consider the future of the program, as well as informing decisions about Medicaid expansion in other states.”