December 5, 2017 — The benefits of the 2014 federal expansion of Medicaid coverage to over 650,000 Michigan residents has not been limited to those who receive its services. The initial expansion, to individuals with income up to 138 percent of the federal poverty level, was fully funded by the federal government until January 2017. Thereafter, states were to assume a small portion of the expansion costs, increasing to no more than 10 percent by 2020.

New research by the Citizens Research Council of Michigan, Medicaid Expansion: Prescription for a Healthier Michigan is based on data from state, federal and scientific sources. The paper finds that the expansion, known as the Healthy Michigan program, has paid dividends to the business sector, the overall economy and to residents who receive health insurance via other sources. Besides the overall advantages arising from Michigan’s expansion, some key findings from the report:

  • The Healthy Michigan Plan has led to health insurance coverage for more than 650,000 of Michigan’s citizens and has kept insurance premiums lower for others, improving the physical, mental and financial well-being of Michigan’s citizens. The program also improved the state’s economy by reducing uncompensated care among Michigan’s hospitals, and by supporting health sector job creation/retention, a healthier workforce, and increased federal spending in the state.
  • The Medicaid program allows for substantial innovation, experimentation and variation at the state level, allowing states to be true “laboratories of democracy.” While new mechanisms like cost-sharing and Health Risk Assessments still need refinement, Michigan has begun to use the program to incentivize healthier lifestyles and responsible health care consumption. Michigan has also become a leader in using Medicaid to address the social determinants of health. 
  • The many gains of the Healthy Michigan Plan may be lost because of an imprecise and poorly designed cost versus savings policy mechanism tied to the program that ignores a wide range of program benefits.
“That Medicaid expansion has saved the state money is not a secret,” said Eric Lupher, president of the Citizens Research Council of Michigan. “The potential to undo the gains of the program – health coverage, improved hospital finance, secondary economic benefits, etc. – based on the poorly crafted cost/savings measure should be of concern to all residents.”  
The report is available at no cost on the Citizens Research Council website.
 
Contact: Nancy Derringer, 734-548-0033; nderringer@crcmich.org

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