Healthy Michigan means better credit for Michigan’s low-income residents. That’s according to a new study on the state’s Medicaid expansion released Monday. It found that people on the plan improved their financial health after getting the insurance coverage.
Sarah Miller is a professor at the University of Michigan’s Ross School of Business. She worked on the study. Miller says they found that because people were in less financial stress health-wise, they didn’t overdraw their credit cards and they paid bills on time. That means their credit scores got better.
Miller said that can have a long-reaching impact.
“Having a higher credit score, being less likely to be in this very sub-prime region of the credit score distribution, can open up a lot of opportunities to borrow and maybe take out an auto loan and be able to get a car and be able to go to work,” Miller said.
Researchers tracked changes in people’s financial health using data from the state. But the researchers did not have access to individual’s identities.
“We actually found, I thought, really striking evidence that around the time people enrolled in the program, you saw a lot of these measures of financial distress really fall substantially,” said Miller.
You can read the study, published by the National Bureau of Economic Research, here.