Expert Q&A: Miller analyzes impacts of Medicaid changes, guaranteed income, and Rx Kids

This piece was originally published by Michigan Ross. Read the original here

Sarah Miller, Ph.D., Buzz and Judy Newton Faculty Fellow and associate professor of business economics and public policy, researches a broad range of economic issues in healthcare, particularly the short-term and long-term effects of public policies that expand health insurance coverage, and the effects of income on health and well-being. Her expertise has been tapped by national media outlets, including The New York Times.

In this Q&A, Miller discusses her ongoing research on guaranteed income for families, the potential impact of the H.R. 1 Act on U.S. citizens who use Medicaid, and the implementation of Rx Kids in Michigan.

Are there any specific healthcare areas that you're studying or paying attention to as we begin 2026?

Yes, I’m definitely watching what goes on with the H.R.1 Act implementation, which is also called the One Big Beautiful Bill Act. I think there are a lot of changes in Medicaid financing and Medicaid eligibility that have been getting a lot of attention. It’s going to be important to watch how states implement those requirements, because there are ways you can do it that are going to be very disruptive, and that are going to result in a lot of coverage loss, and then there are ways where you can make it more streamlined. It will probably still be somewhat disruptive either way, but it's one thing to write the law and say we're going to have work requirements for Medicaid populations, and another to actually be on the ground and figure out how to implement them.

I’m also keeping an eye on changes in Medicaid financing. How are states going to deal with not being able to get the same kind of revenue for Medicaid that they've been relying on? Are they going to try to find other sources of revenue? Are they going to try to cut benefits? States have to balance their budgets and can’t just run a deficit. So I am watching that closely.

Rural transformation grants are also part of H.R. 1, so there's funding for rural health. I don't know how that's going to be implemented or who's going to get it, so people are still kind of figuring out what it's going to do. I think that's going to be another aspect to look out for.

Of course, the very high-profile policy that shut down the federal government earlier this year is the extension of the enhanced Affordable Care Act premium tax credits. A law to extend these enhanced credits for three more years passed the House, but it's now in the Senate, and we have to see how it shakes out. There's a lot going on in health policy. It's going to be an exciting year.

You have studied guaranteed income programs for a number of years, including a paper that was published in 2025. What are the findings?

Our team circulated a new working paper last summer on the effects of guaranteed income on parenting and kids. (We gave a population of low-income people in various areas of the United States $1,000 per month for three years, and there were no restrictions on how they could use the money. At the same time, a control group received $50 per month, giving us a point of comparison.) We had previously looked at adults and different aspects of the adults' behavior, their health, and their labor supply. We hadn't dug into what was going on with their kids. A lot of them had kids; although they weren't required to have kids to be in the study, the average age of our participants was about 30, so many people had kids who might have been affected.

This study has been so interesting to me because there's always this tendency to want to say everything we found was amazing, or everything was horrible. It's more nuanced than that, and I think you see those nuances in the patterns we found for parenting and children. We found some really interesting effects of the cash transfer on parenting. We saw that when we gave people more income and greater flexibility, they could be better parents. They could spend more money on their kids. They could be more engaged with their kids. We asked a lot of questions about how they monitor their kids. For example, ‘Do your kids ever go out at night, and you don't know where they went? Do they always leave a note if they go out, and do you know who your kids’ friends are?’ We asked about how engaged they are as parents, and we found that those responses improved significantly. We also saw reports that corporal punishment went down. That's been one theory: that some people turn to this because they're very stressed out and having trouble dealing with it. I'm not justifying anything, but people who got the guaranteed income reported less of that type of discipline, which was really interesting.

Generally, parents' spending on their kids increased across all categories, including food, clothing, and healthcare. That was a good thing.

The results were more disappointing when we actually looked at the kids' outcomes. Parents are making these investments, and they're more engaged, so you expect that kids are doing better in school, they’re getting better grades and test scores. But we didn't really find much going on there, at least over the three-year period we were able to observe. We asked whether the kids were doing better in terms of their difficulties and stress, and, ironically, parents were more likely to report that their kids were stressed or hyperactive if they received the larger cash gift. That could be the result of the parents providing more supervision, being more engaged, and paying more attention to their kids. It’s really a nuanced thing. It's a short period of time (three years), and we see that they're making these changes in the relationship; they're investing time and money in the kids. Maybe some benefits will become more obvious when the kids are older and going to college. But we didn't see that now, despite these better behaviors. We're going to follow up with them long-term, and we may have more information when the kids get a little older and start making decisions about college or careers.

Are there other research items you are excited about?

On the cash transfer front, we have two follow-up guaranteed income experiments that we did with Cook County, Illinois, and the City of Chicago. In the Cook County experiment, $42 million in payments were made to eligible residents. In Chicago, it was around $25 million. So, they're pretty substantial programs. They have a lot more people than in the first experiment we did, so even though the payment amounts are lower ($500 per month instead of $1,000 per month), I think we’ll learn a lot. We’ll be able to do a better job of digging in and seeing what kind of people benefit from cash transfers the most. I’m looking forward to digging into that in 2026.

What do you think about the Rx Kids program, which is starting in Detroit and has been in place in many other cities across Michigan?

I think it's a really innovative policy idea. It's now being picked up by multiple cities in Michigan. It started in Flint, but many cities are doing it now.

The idea is that you have this crucial period when you're having a baby, and the mom is pregnant. It's a really important time for the child's development. And then the first year of life. That's also an important, obviously critical time for the baby, but it can be very stressful for the parents. The idea is to give everyone cash transfers during pregnancy and for the first year of the child's life. I think that's one thing that's really unique. A lot of these programs are very complicated because you have to prove that you're below a certain income, and how do you prove that? If you don't have a job, how do you prove that you don't have a job? It’s a hard thing to do. You might have to show pay stubs, and there's a lot of paperwork.

The thing about Rx Kids that's really innovative is that there is none of that red tape. Everyone gets it. So, if you live in Flint and if you happen to make a lot of money, you can still get the cash transfer just like everyone else. All you have to be is a resident of Flint or one of these other cities where it's being rolled out.

I am not involved in the Rx Kids evaluation. But some really amazing University of Michigan researchers are, like Luke Shaefer at the Ford School of Public Policy, and Sumit Agarwal, who is a primary care physician and a professor in the U-M Medical School.

I've been following their work closely, and they've been finding some interesting effects of the program in this early-stage research. The moms who get the cash supplement get more prenatal care, for example. They're much more likely to receive adequate prenatal care during their pregnancy, which is a great outcome. They also found psychological benefits for the moms when they conducted surveys. I think they're going to study the kids' health over time as well. I’m sure we’ll learn more soon.

One problem with cash transfer programs is that they can be very distortive, as economists call it. This means you can get this money as long as your income remains below a threshold. Well, because of that structure, as you work more, say you get offered a promotion, or you get offered more hours, you're afraid to take it, because then you're going to lose the support that you really count on. I think Rx Kids is innovative because they're not imposing an income cutoff. The money is just there to help you during this kind of critical period, and it won’t be taken away if you take a better job or work more hours.

Documents & Links

The Impact of Unconditional Cash Transfers on Parenting and Children