August 27, 2013 at 1:00 am

Michigan Senate passes Medicaid expansion after compromise

Lansing — Gov. Rick Snyder overcame stiff opposition Tuesday from fellow Republicans as the GOP-controlled Senate approved his highest legislative priority — the expansion of Michigan’s Medicaid program.

It capped a day of intra-party strife as most Republican senators questioned whether Michigan should expand its involvement with the federal government health insurance program for the poor. The Senate initially voted 19-18 for the proposal, as the abstention of one GOP senator left the legislation one vote short of the number needed for approval.

But supporters regrouped and tacked on an amendment by Sen. Tom Casperson, R-Escanaba, who initially rejected the legislation, that resulted in a 20-18 vote for approval to expand Medicaid to almost half a million Michigan residents.

“The Senate should be commended for approving the Healthy Michigan plan, which will make a difference in the lives of nearly half-a-million Michiganders along with saving tax dollars and boosting our economy,” Snyder said in a statement.

“This is not a generic Medicaid expansion, it’s a Michigan plan,” he said. “It’s about helping 470,000 Michiganders have a better life.”

The measure now returns to the GOP-led House, which passed the bill in June and is expected to send it to Snyder next week for his signature.

Passage was heralded Tuesday night by a range of groups representing the health care industry, social advocates, clergy and unions. Opponents, including conservative and tea party groups, condemned the move and vowed retribution at the polls.

The outcome was a mixed victory for the governor because approval of the legislation came without the requisite two-thirds of Senate votes required, or 26, to become effective immediately. The state won’t be able to begin signing up Medicaid recipients in early 2014 under the federal Affordable Care Act if the measure doesn’t become effective immediately.

The House next could pass the bill with immediate effect, after which the Senate would have another chance to drum up enough votes to give the bill immediate effect. If that isn’t granted, “it presents some challenges, but as a practical matter, I think that’s something we can talk to the federal government about,” Snyder said. He said Community Health Director Jim Havemen is working closely with federal officials on those issues.

Prior to the second vote Tuesday, the Senate approved an amendment by Casperson that would require hospital payments to be no more than 115 percent of the Medicare rate for patients with incomes up to 250 percent of the poverty level.

The reimbursement rate for Medicare is slightly higher than for the Medicaid program. Senate Majority Leader Randy Richardville said the purpose of the amendment was to provide access to health care for a greater number of people at that income level.

Passage of the governor’s plan “was a very heavy lift” for Republicans, Richardville said.

“I thought this would be difficult from the beginning,” said Richardville, R-Monroe. “It's tough when you’re digging deep and there are beliefs.”

When asked if Snyder’s presence helped, Richardville said, “Did the governor help? I’m just not going to comment on that.”

It was the second vote taken on the bill Tuesday. The measure failed 19-18 earlier in the day when Sen. Patrick Colbeck R-Canton Township, a fierce opponent of the federal Affordable Care Act and Medicaid expansion, withheld his vote to avoid a 19-19 tie, which would have allowed Snyder’s Lt. Gov. Brian Calley to cast a tie-breaking vote in favor of the expansion.

Colbeck’s move occurred after his two-bill package was not allowed to come to the floor for a vote. Another proposal by Sen. Bruce Caswell, R-Hillsdale, which, like Colbeck’s legislation, would have eliminated Michigan’s Medicaid program and replaced it with a state-funded plan, was defeated in a 29-9 vote.

The Senate voted to reconsider the legislation and hammered out the compromise.

The Medicaid bill would accept $1.7 billion in federal funding next year to add 325,000 childless adults to the program, and 400,000 by 2015.

The bill would provide taxpayer-funded health insurance starting Jan. 1 for single adults earning about $15,500 a year or a family of three with a household income of about $26,500, according to the nonpartisan Senate Fiscal Agency. Michigan is on the road to become the 25th state in the nation to expand Medicaid if the House adopts the Senate legislation. Twenty-one states are not moving forward on the bill, and six states continue to debate the issue.

Colbeck urged Senate colleagues to vote no on the expansion bill, saying, “It’s nothing short of government control of our health care decisions.”

“Hitching our wagon to this Obamacare train is a very high-risk venture,” he said before the chamber. “More people are going to be put into this expansion population because of Obamacare. When they’ve deployed this in other states it’s been three times the original estimate.”

Before the first vote, Sen. Roger Kahn, R-Saginaw, who led a Senate work group on the issue, described the expansion bill as “nation-leading” legislation that would bring $2 billion in federal health care investment to Michigan and create 25,000 jobs. The legislation would require federal waivers for reforms including co-pays and a 48-month time limit for expanded Medicaid benefits.

“This is not Obamacare or the Affordable Care Act,” he said. “This is our bill, our bipartisan bill, that will reform the cost of health care throughout the state and become a model for the country.

“This bill becomes a hand up and not just a hand out for individuals.”

The Senate’s 26 Republicans are bitterly divided on the issue, with many opposed to accepting what Sen. Mike Green, R-Mayville, called “federal funny money.”

Under the Affordable Care Act, the federal government agrees to pay 100 percent of the costs through 2017, when Michigan will gradually start contributing up to a maximum of 10 percent by 2020. But many conservatives don’t believe the federal government will follow through on that promise.

All 12 Senate Democrats voted for Medicaid expansion as a way to thin the ranks of the uninsured and reduce health care costs.

“This work group product is a Michigan plan,” said Senate Democratic Leader Gretchen Whitmer of East Lansing. “It’s something that was put together by Republicans and Democrats alike to make sure it was in the best interests of Michigan.

As the day grew later with little progress on the issue, the chamber began to fill with top members of the Snyder administration, including state Department of Community Health Director Jim Haveman. Budget Director John Nixon was seen talking on the Senate floor with Sen. John Pappageorge, R-Troy, whose position on the expansion was unclear until he voted against the bill.

Earlier in the afternoon, the Senate gallery erupted in raucous chants from supporters. Sergeants at arms escorted some protesters out of the gallery above the Senate floor when they refused to heed an order from Lt. Gov. Brian Calley to stop their chants of “Time to Vote! Time to Vote!”

Tuesday night, the Michigan Health and Hospital Association, Michigan League for Public Policy and Michigan AFL-CIO urged the House to swiftly approve the measure so it can be signed into law by Snyder.

“This is a huge victory for low-income Michiganders who would have otherwise been excluded from receiving the benefits promised by the Affordable Care Act,” said Pastor Robert Cornwall, president of the Metro Coalition of Congregations, in a statement.

Dr. Ora H. Pescovitz, CEO of the University of Michigan Health System, said: "Expanding Medicaid will reduce health care costs by allowing people to get preventive care, instead of seeking care in our emergency rooms, the most expensive place for treatment.”

Opponent Scott Hagerstrom, state director of Americans for Prosperity-Michigan, said, "By agreeing to expand Medicaid they are complicit with the Obama administration in implementing the Patient Protection and Affordable Care Act.

“The state Senators who voted to expand Medicaid just voted to implement ObamaCare. We are prepared to dedicate significant resources to educating citizens on how their senators voted on this issue."

kbouffard@detroitnews.com
(313) 222-2661
Staff Writer Chad Livengood and the Associated Press contributed.

Senate Majority Leader Randy Richardville, right, and Sen. Pat Colbeck, R-Canton, a fierce opponent of the federal Affordable Care Act and Medicaid expansion who withheld his vote to avoid a 19-19 tie, talk at Colbeck's desk on the floor of the Senate Tuesday afternoon. / Dale G. Young
Senate Majority Leader Randy Richardville and Senate Minority Leader ... (Dale G. Young / The Detroit News)
'Patriot Pat,' left, and 'Freedom Frank' demonstrate in front of the ... (Dale G. Young / The Detroit News)
Demonstrators in the gallery overlooking the floor as the Michigan Senate ... (Dale G. Young / Detroit News)