Economic Impact of Healthy Michigan Plan

This project will model the impact of Medicaid expansion in Michigan on economic outcomes at the state level, including employment, state personal income and state government tax revenue. The team will use the PI+ Regional Model for the analysis, which generates realistic year-by-year estimates of the total regional effects of any specific policy initiative and allows for interpretation of predicted economic and demographic effects. The model features several different methodologies from regional science and economics, and includes a computable general equilibrium-like model of the state economy. They will look at the following categories as major economic impacts of Medicaid expansion: an increase in spending on medical services by the federal and state government; an increase in federal taxes on Michigan residents to help finance the increase in federal spending; an increase in taxes or reduction in other government spending at the state level; a potential reallocation of consumer spending from out-of-pocket spending on medical services to other categories; a potential increase in income of medical service providers who are serving the newly covered Medicaid population, and an increase in tax revenue to the state government because of the increased economic activity driven by the Medicaid expansion.