In 2017, the federal government is expected to cover 95% of Medicaid costs in states that have expanded their Medicaid programs pursuant to the ACA.
One study in Michigan highlighted three major trends: decreased state level spending on health services, increased economic activity in areas such as construction and retail services, and increased spending in consumer goods (the less Medicaid recipients spent on healthcare costs, the more they spent on other items). Although the researchers concluded that the expanded Medicaid program benefited Michigan, the study did point to some potential limitations including new spending that actually results from cost shifting from states and consumers to the federal government.
From The New England Journal of Medicine, ” Economic Effects of Medicaid Expansion in Michigan”
Excerpt: “Similar economic benefits are almost certainly accruing to the other 30 states that have expanded Medicaid, but not to the 19 states that haven’t done so. State policymakers can consider these benefits along with health and financial effects for enrollees as they decide whether to continue or initiate Medicaid expansion.”