Lansing — Michigan is among 32 states that could eventually be forced to wind down popular Medicaid expansion programs under a new House Republican plan endorsed by President Donald Trump to repeal and replace the Affordable Care Act.
More than 650,000 residents are now enrolled in the Healthy Michigan plan, which is largely funded by the federal government. It provides health insurance to residents who earn up to 138 percent of the poverty level — $16,000 for an individual or $33,000 for a family of four.
House Republicans say their new plan would provide a “stable transition” by retaining full Medicaid expansion coverage through the end of 2019. But nonpartisan experts say the federal government would end enhanced funding for new enrollees beginning in 2020, and patients who lost eligibility after that would not be allowed to re-enroll, phasing down the program over time.
“The real challenge I think for Michigan is to not look at the package as it relates to year one, which is bound to look good because they’re trying to sell it politically, but to look at what the package is going to morph into five years down the road,” said Dennis Paradis, executive director of the Michigan Health Policy Forum.
That’s a difficult process though, according to Paradis, who said there are many unknowns about the new plan, including cost implications for the state and whether the law would give Michigan flexibility to set its own bar for Medicaid eligibility.
MaryBeth Musumeci, associate director at the Kaiser Family Foundation’s Program on Medicaid and the Uninsured, said the GOP proposal could put states like Michigan in the difficult position of determining whether they can afford expanded coverage on their own.
“They would have to come up with this money from somewhere else because there would be a substantial reduction in federal funding,” Musumeci said.
Paradis was part of a group that met Tuesday night with Gov. Rick Snyder’s chief of staff, Dick Posthumus, to try and make sense of the legislation.
Snyder has remained quiet about the new House Republican plan despite his recent efforts to promote the Healthy Michigan program in Washington, D.C. His office offered only a brief comment Wednesday.
“We are continuing to review the proposal and its potential impact on all Michiganders,” spokeswoman Anna Heaton said. “Gov. Snyder is keeping a close eye on the bill as it moves through the committee process and using the opportunity to reiterate to members of Congress the core reform principles shared by him and other governors when they traveled to D.C. last week.”
Republican Rep. Tim Walberg of Tipton, a member of the House Energy and Commerce Committee, said Snyder had significant conversations with the committee and GOP leadership in appealing for an opportunity for states like Michigan to develop further ways to deal with the Medicaid population — “not just cutting it off or a block grant approach.”
“We have to have a safety net for people,” Walberg told The Detroit News. “We said we would do an orderly transition and not cut people off.”
Some of Snyder’s fellow Republican governors in states that expanded Medicaid under Democratic President Barack Obama’s signature health care law have complained about the proposed overhaul.
“Phasing out Medicaid coverage without a viable alternative is counterproductive and unnecessarily puts at risk our ability to treat the drug-addicted, mentally ill and working poor who now have access to a stable source of care,” Ohio Gov. John Kasich said in a statement.
White House Press Secretary Sean Spicer said Tuesday the goal of Medicaid was always to help the poor and disabled but Obamacare allowed the expansion of the program in some states to “able-bodied individuals that in a way that had never been done before.”
“That’s led largely to the ballooning costs,” Spicer told reporters. “I think a lot of the reforms that will be contained in this bill will address that. But I think we’ve got to let it work its will through the (legislative) process.”
“The Healthy Michigan plan is widely supported by our business community and by health care providers because of the economic impact it brings to our state,” said Rep. Debbie Dingell, a Dearborn Democrat and member of the House Energy and Commerce panel.
“A report by the University of Michigan … found that Medicaid expansion is responsible for adding 39,000 jobs in our state in just 2016. Two thirds of these new jobs are outside the health care sector.”
“Why would we turn our backs on that?”
Some conservative Republicans have also criticized the bill for maintaining expanded Medicaid eligibility for another three years, leaving the federal government with the bulk of the tab.
“You’re not going to please everybody,” Walberg said. “Some say we do too much, some we don’t do enough. But in the main, we want to be able to say we did the right thing and people have had that orderly process of transition, and in the end, we ratchet things down to where they need to be, and ratchet things up to where they need to be and give flexibility to the states to administer the programs they’re responsible for.”
At a markup of the bill Wednesday, Rep. Fred Upton, a Republican from St. Joseph, stressed it would ensure those who joined Medicaid under the expansion would not lose coverage.
“This bill ensures that the rug is not pulled out from beneath them,” said Upton, arguing that “Obamacare is failing” and Americans deserve results from Congress.
“I am committed to working with all of my colleagues to deliver bipartisan health care reform and relief for all,” he said.
Snyder and Michigan’s GOP-led Legislature signed off on Medicaid expansion in 2013, but added unique requirements for recipients who earn between 100 and 133 percent of the poverty level, including Health Savings Account contributions and co-pays that can be reduced through healthy behaviors.
Healthy Michigan required two federal waivers for full implementation. It was initially fully funded under the Affordable Care Act, but Michigan is on the hook for 5 percent of the costs this year and 10 percent by 2020.
Laura Appel, senior vice president of the Michigan Health and Hospital Association, said her group is still seeking clarification on some aspects of the new House GOP proposal but is generally “concerned” about the implications for Medicaid expansion.
As part of the Affordable Care Act, hospitals agreed to Medicare reimbursement reductions in order to help the federal government pay for expanded Medicaid eligibility, she said.
“So we’re concerned that we keep up our end of the bargain and yet the cover expansion, best case scenario, fades,” Appel said. “We’ve got some concerns, and the concerns are mostly about the expansion population and our ability to keep them covered.”
The House GOP plan would also change the way the federal government funds Medicaid as a whole. It would cap funding to states on a per-person basis, rather than require the federal government to cover a share of total state costs.
House Energy and Commerce Chairman Greg Walden, an Oregon Republican, said the reforms will allow states to “innovate and drive more of their dollars into coverage, rather than into the bureaucratic process they have to go through to get waivers.”
Walden said states that didn’t already expand Medicaid won’t be able to under the GOP plan. If they did expand, states may add new enrollees until Dec. 31, 2019.
“What we’re trying to do is what we pledged we would do — is not pull the rug out from anybody, and make sure there’s a transition to a better way, with more policies, more opportunities,” Walden told reporters.