November 06, 2019

Macroeconomic Feedback Effects of Medicaid Expansion: Evidence from Michigan

The University of Michigan’s Research Seminar in Quantitative Economics (RSQE) selected the state of Michigan as a case study for evaluating Medicaid expansion and its state-level fiscal impacts. This analysis took into account the importance of macroeconomic feedback effects relative to the fiscal effects ordinarily estimated by state budget agencies. Michigan established the Healthy Michigan Plan (HMP) in 2014 and by December 2018, the plan covered more than 670,000 low-income residents. The REMI model was utilized in this report to analyze the macroeconomic feedback effects that correspond with the impacts in spending related to the HMP because of the importance of modeling year-by-year impacts and the model’s realistic dynamic employment and demographic responses. The methodology from this study can be incorporated into any state-level analysis of the fiscal impacts associated with expanding Medicaid.

University of Michigan – Macroeconomic Feedback Effects of Medicaid Expansion-Evidence from Michigan [full PDF]