Tariffs and fiscal fallout: How trade policy drives government healthcare costs
Presentation Type
Abstract
Faculty Advisor
Orkideh Gharehgozli
Access Type
Event
Start Date
25-4-2025 12:00 PM
End Date
25-4-2025 1:00 PM
Description
On March 12th, the Consumer Price Index (CPI) data released by FRED recorded an annual inflation rate of 2.8%, which decreased by 0.2% in February. However, the new tariffs will not affect the inflation rate until a few months. Considering the resolution in Congress to cut the budget for Medicaid, this research uses FRED's macroeconomic data (1970-2025) to explore the relationship between the fluctuation of inflation (CPI), medical care costs, and government healthcare expenditures by applying correlation analysis. It aims to assess the economic feasibility of this resolution while the uncertainty in the market for the upcoming months remains high because of tariffs and the escalating trade war. The quantitative results highlighted positive relationships between CPI, medical care costs, and government healthcare expenditures. The study has provided two key points: Medical care costs tend to increase during high inflation, suggesting a potential rise when new tariffs affect the inflation rate. Government healthcare expenditures tend to increase in response to the high demand for Medicaid to access affordable care when medical care costs are high. Both key points suggested that the resolution to cut the Medicaid budget is risky. When the new tariffs affect the inflation rate and ultimately drive up medical care costs, it could severely impact the ability to access affordable care for low-income and marginalized populations. These key points encourage policymakers to reconsider the proposal of a Medicaid budget cut that could worsen healthcare access issues during economic instability.
Tariffs and fiscal fallout: How trade policy drives government healthcare costs
On March 12th, the Consumer Price Index (CPI) data released by FRED recorded an annual inflation rate of 2.8%, which decreased by 0.2% in February. However, the new tariffs will not affect the inflation rate until a few months. Considering the resolution in Congress to cut the budget for Medicaid, this research uses FRED's macroeconomic data (1970-2025) to explore the relationship between the fluctuation of inflation (CPI), medical care costs, and government healthcare expenditures by applying correlation analysis. It aims to assess the economic feasibility of this resolution while the uncertainty in the market for the upcoming months remains high because of tariffs and the escalating trade war. The quantitative results highlighted positive relationships between CPI, medical care costs, and government healthcare expenditures. The study has provided two key points: Medical care costs tend to increase during high inflation, suggesting a potential rise when new tariffs affect the inflation rate. Government healthcare expenditures tend to increase in response to the high demand for Medicaid to access affordable care when medical care costs are high. Both key points suggested that the resolution to cut the Medicaid budget is risky. When the new tariffs affect the inflation rate and ultimately drive up medical care costs, it could severely impact the ability to access affordable care for low-income and marginalized populations. These key points encourage policymakers to reconsider the proposal of a Medicaid budget cut that could worsen healthcare access issues during economic instability.
Comments
Poster presentation at the 2025 Student Research Symposium.