An article by John Z. Ayanian, Gabriel M. Ehrlich, Donald R. Grimes and Helen Levy titled, "Economic Effects of Medicaid Expansion in Michigan" was published in The New England Journal of Medicine on January 4, 2017.
Under the Affordable Care Act, 31 U.S. states have opted to expand Medicaid coverage to nonelderly adults with annual incomes up to 138% of the federal poverty level (approximately $16,400 for a single adult in 2016). The federal government currently pays the full cost of Medicaid expansion in these states. The federal share decreases to 95% in 2017 and to 90% in 2020, with participating states required to cover the remaining 5% and then 10% of the expansion costs. In some states, the anticipated costs for this newly insured population have been an obstacle to expansion.
Michigan’s Medicaid expansion, the Healthy Michigan Plan, has enrolled approximately 600,000 low-income adults. The total cost in fiscal year 2016 was about $3.6 billion, financed almost entirely by the federal government. When the state legislature approved the expansion in 2013, it required that the state achieve other savings and revenue to offset its share of expansion costs beginning in 2017 — or Michigan would end the expansion.
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