What does Medicaid do?

No matter where you live in the United States, or where you get your health insurance, you probably know people who have Medicaid coverage for their health care.

After all, Medicaid covers nearly 80 million people right now. 

Most of them are older adults, people with disabilities, children and pregnant women. 

But many others also rely on it too.

That’s one out of every five people in the U.S., all of them with low incomes.

Medicaid means they can get care from hospitals, doctor’s offices, clinics, nursing homes, pharmacies, home care services and mental health therapists for little or no cost.

Medicaid covers 4 out of every 10 births in the U.S., half of all children, and more than half of long-term nursing home stays.

But all that care costs about $880 billion a year – a sizable chunk of federal and state budgets. 

That’s why policymakers in Washington, D.C., and state capitals are discussing the future of Medicaid and its program for children and teens, the Children’s Health Insurance Program, or CHIP.

To help them make decisions, they can turn to studies done by Medicaid researchers at the University of Michigan Institute for Healthcare Policy and Innovation.

“Over the last 60 years, and especially the last decade, Medicaid has grown into a comprehensive program that not only provides critical health care services to those who need them but also helps support the broader health care system we all rely on, including hospitals, nursing homes and specialized facilities for children’s health,” said John Z. Ayanian, M.D., M.P.P., IHPI’s director and a longtime Medicaid researcher. 

“But with that growth has come growth in costs, and policymakers want to make sure they’re spending wisely. That’s where research comes in.” 

10 things that U-M research has shown about Medicaid

1. It leads to better health and less risk of dying: 

   A review of all available studies by a pair of U-M researchers comes to this key conclusion for all types of insurance, actually. But they say the effect is especially clear in studies of people enrolled in Medicaid.  

   This review includes the work of another U-M researcher and her colleagues, who studied data from the first three years after states gained access to more federal dollars so they could expand Medicaid to cover more people. 

   They found that deaths dropped by more than 9% among low-income people in expansion states, compared with those in states that didn’t expand Medicaid. 

   If all states had expanded the program, more than 15,000 deaths would have been prevented in just three years. 

2. It supports the responsible use of health care: 

   Ayanian and his colleagues have studied the people who receive Medicaid coverage through the Healthy Michigan Plan, which in May 2025 includes more than 700,000 people across all counties of the state. 

   Their recent report showed that nearly all surveyed enrollees have a primary care provider (physician, nurse practitioner or physician assistant), that 81% of them saw that provider in the last year, and that long-term enrollees were very likely to get cancer screenings such as mammograms. 

   And those who had regular preventive care were less likely to need emergency care.

3. It enhances use of high-value care:

   A U-M study compared states that expanded Medicaid in the last decade, with those that didn’t. 

   It showed a 19% increase in the likelihood that a clinic visit by a new Medicaid enrollee would include high value care in expansion states. 

   In non-expansion states that same measure dropped by 24% in the same timeframe. 

   High value care means care that studies have shown a person can really benefit from, because of their specific age, health conditions and other factors.

4. It helps low income people stay in their jobs, seek jobs or train for jobs if they are able:

   U-M researchers found that half of people in Michigan’s Medicaid expansion program already work full or part-time, even though their income is low enough to qualify for the program. 

   The rest are out of work, studying or training for a career, or unable to work due to health issues, caregiving obligations or other factors.

   U-M researchers found that the percentage of people enrolled in Michigan's Medicaid expansion program who had jobs or were enrolled in school jumped six percentage points in one year, a bigger jump than the state’s overall employment.

   Another U-M study showed that 69% of enrollees who had jobs said they did better at work since enrolling in Medicaid.

   And 55% of those who were out of work said the coverage made them better able to look for a job.

5. It helps people with mental health conditions, including those with addiction to drugs or alcohol, get care: 
   U-M research finds that about half of the people covered by Michigan’s Medicaid expansion program have what are called behavioral health conditions, including mental health disorders such as depression, or addiction to alcohol or drugs.

   The team found that people with these conditions got an especially big boost in many health and work-related measures after enrolling in the program – bigger than the improvements seen in people who enrolled in the program but didn’t have a behavioral health condition.

   A study by a U-M team also shows that when states “unwound” the special Medicaid enrollment that started during the pandemic, people who were taking medication that treats opioid addiction were more likely to have disruptions in their access to that medicine if they lived in one of the states that had the biggest drops in Medicaid enrollment.

6. It helps older adults who qualify for both Medicare and Medicaid:

   When someone is over age 65 and has an especially low income even with Social Security benefits and other sources, they can qualify for both Medicare and Medicaid. 

   These “dual eligible” individuals often have a lot of medical needs, and research has shown the positive impact of Medicaid coverage for them.

   For instance, a recent U-M study showed that dual-eligible individuals who lost their Medicaid coverage during the “unwinding” process and then re-enrolled were much more likely to say they missed care due to cost, especially dental care and home care.

   Another U-M study showed that when a dual-eligible person’s income rose to just above Medicaid-eligible levels, they were then much less likely to see the doctor and less likely to be able to afford prescription medications -- especially if they were Black or Hispanic.

7. Its telehealth coverage helps people get care they wouldn’t get otherwise:

   People with low incomes often face barriers to getting medical care in person, such as transportation challenges and caregiving duties.

   A recent U-M study asked people with Medicaid about their use of video and phone telehealth to get care. 

   Nearly two-thirds of those who had a telehealth appointment in the past year said they received care that they could not or would not have received otherwise.

8. It helps people improve their financial health:

   Because Medicaid plans are designed for people with low incomes, people with this coverage only have to pay a few dollars, if anything, for appointments or prescriptions. 

   But Medicaid has an even greater impact on the financial health of those who enroll.

   A U-M study showed that in just the first year after enrolling, Michigan Medicaid expansion participants had sizable drops in their unpaid debts — medical debts and overdrawn credit cards in particular — and fewer bankruptcies and evictions, while their credit scores and approvals for car loans rose. 

   Those with chronic illnesses or who had a hospital stay or an emergency department visit after they enrolled saw the largest financial benefits.

9. It can help people get dental care that can affect their overall health and ability to work:

   While dental coverage under Medicaid varies from state to state, studies suggest it can have a major impact when it’s included.

   Of people who saw a dentist within two years of getting coverage through Michigan’s Medicaid expansion program, 57% said their dental health had improved in that short time, and the majority of those with or without jobs said their improved oral health helped them do a better job at work or made them better able to look for a job.

10.  It helps keep hospitals and clinics financially stable and able to provide care for all: 

    Ayanian and his colleagues have surveyed health care providers about the impacts of the Medicaid expansion in the state, and looked at data on Michigan hospitals from public sources.

    They found that Michigan hospitals saw the amount of care for which they did not receive payment (also called uncompensated care) drop by half after Medicaid expansion, and that the percentage of hospitalized patients without insurance dropped by 69%. 

    Primary care providers and safety-net clinics also reported improvements in financial stability and their ability to add services. 

Learn more about research on Medicaid by U-M faculty who belong to IHPI. Learn more about IHPI’s evaluation of Michigan’s Medicaid expansion.