Medicaid expansion hangs in balance in Michigan gov race

Jonathan Oosting
The Detroit News
Gretchen Whitmer and Bill Schuette

Lansing — Michigan’s next governor stands to play a substantial role in deciding the fate of Healthy Michigan, the popular Medicaid expansion program championed by term-limited Republican Gov. Rick Snyder that could end in coming years if looming costs trip a legislative kill switch.

The future of the government-run health insurance program has emerged as a major issue in the gubernatorial race between Democrat Gretchen Whitmer and Republican Bill Schuette, who are competing with third-party candidates to replace Snyder.

Whitmer, who secured votes for the Healthy Michigan legislation as Senate minority leader in 2013, says she’ll fight to protect and potentially expand the program. She points to Schuette’s record of opposition to the federal Affordable Care Act as proof he could try to dismantle it.

Schuette attacked Lt. Gov. Brian Calley in the Republican primary for helping “bring more Obamacare to Michigan” by supporting Medicaid expansion but now says the Healthy Michigan program that insures more than 660,000 residents "is the law, and it’s not going anywhere."

Those who contend he wants to end Healthy Michigan “ought to get their facts correct,” Schuette told The Detroit News.

Critics argue Schuette cannot be trusted to protect the program because of his history of opposition to former President Barack Obama's signature health care law that provided funding for states to expand Medicaid eligibility.

As attorney general, Schuette joined at least nine lawsuits fighting the Affordable Care Act. In a 2017 fundraising mailer, he said he opposed the law, “including the ‘free’ federal Medicaid dollars from Obama that leave Michigan taxpayers on the hook for more!”

"He has been the chief advocate against Healthy Michigan in our state ever since we started the bipartisan negotiations on it," Whitmer told The Detroit News. "The biggest threat to health care in Michigan is Bill Schuette."

But the Medicaid expansion program is threatened by declining federal aid, Schuette notes.

The federal government fully funded the Medicaid expansion program the first three years, but the state began paying a share in 2017 and will be required to cover 10 percent of the costs by 2020. By then, it’s estimated to cost the state roughly $380 million a year.

“We know the federal funds are not indefinite or infinite. And that’s why we are encouraging people to get a job," Schuette told The News' editorial board on Monday. "And then that does leave resources available for those who need help and need assistance. And that’s the kind of Michigan we need to be.” 

Work requirements

Healthy Michigan expanded eligibility to residents who earn up to 138 percent of the poverty level, currently $16,753 for an individual or $34,638 for a family of four, and is one of Snyder’s proudest accomplishments. The term-limited Republican governor helped coax reluctant GOP lawmakers to accept federal funding through the Affordable Care Act, and enrollment has far exceeded initial projections.

Schuette champions work requirements the GOP-led Legislature recently voted to add to the program and says he would ensure those rules are implemented if elected. 

“Whitmer and (running mate Garlin) Gilchrist are opposed to that, and that’s wrong,” Schuette said. “What it does is it encourages a culture of work, and there are a lot of jobs that are looking for people to walk in the door.”

Gov. Rick Snyder promotes the Healthy Michigan program at Oakwood Hospital in Dearborn in 2013.

Snyder, who has not endorsed in the governor's race, last week submitted a waiver application to the federal government to continue the program and implement the work requirements. By 2020, many recipients would need to work at least 80 hours per month or risk losing coverage. 

Whitmer calls Healthy Michigan "the best part" of Snyder's tenure but would fight against the pending work requirements, predicting the policy change could be "devastating" for residents who could lose health insurance coverage. 

"If it was really about getting people to work, you open up opportunities for training, you level barriers to child care or transportation to get to jobs," she said. "But instead all they do is take away health care from people. That's really what the goal is."

President Donald Trump’s administration last year invited states for the first time to add work requirements their Medicaid programs. Kentucky was one of the first to do so, but a federal judge in June blocked that state’s law because it did not consider the coverage impact for residents.

The new Michigan work rules could apply to roughly 540,000 able-bodied adults, according to the nonpartisan House Fiscal Agency. Analysts project about 5 to 10 percent of recipients — 27,000 to 54,000 — will drop out or leave the program as a result.

Cost trigger looming

Republican lawmakers added a trigger to the law that would end the Healthy Michigan plan if state costs outweigh savings in mental health and other budget areas. Fiscal analysts have warned this could happen by fiscal year 2021 if the law is not changed, which means the state’s next governor may need to reshape state health care.

“If it is triggered, the program will end and the state would then have to revisit that policy or deal with the consequences of the program ending,” said Tim Michling, a public health and policy research associate for the non-partisan Citizens Research Council.

The cost versus savings trigger was an “ill-conceived” policy that abdicated the Legislature’s oversight role and does not consider the broader impact of the program beyond the state budget, he said.

The new work requirement law includes a similar trigger that would end the program if the state does not win approval on the federal waiver the Snyder administration requested last week.

The state’s next governor and Legislature could have a “huge impact” on Medicaid expansion in Michigan, said David Jones, an associate professor in the public health department at Boston University.

“Whoever is the head executive is going to have a major role in setting the tone and certainly will be instrumental in choosing people who run key agencies,” he said. “And those trigger clauses in law are presumably open to being changed down the road.“

Jim Haveman, former director of the Michigan Department of Community Health under Snyder, said Schuette fought the expansion effort in the Legislature and believes his new comments that the program is “not going anywhere” are “more of a political statement.”

“Bill Schuette as attorney general ... worked against us when we were trying to get the votes in the House. I don’t have any faith if he becomes governor he will continue the Healthy Michigan plan,” Haveman said.

But ending a benefits program is difficult politically, Jones said. He noted Kentucky Gov. Matt Bevins railed on the Affordable Care Act in his 2015 GOP primary, softened his tone in the general election and has stopped short of repealing his state’s Medicaid expansion program since taking office.

“Once you give a benefit to people and it becomes part of the culture that the state is helping these people, it’s very hard to walk back from that," Jones said.

Pre-existing conditions

Schuette remains a critic of Obamacare, calling it a “failure” that did not stop health insurance rates from rising. The Midland Republican supported congressional attempts last year to repeal and replace the federal health care law.

But Schuette has also consistently said he supports some of the law's most popular features and wants them included in any replacement, including coverage for pre-existing conditions and allowing children to stay on their parents’ insurance until they turn 26.

The Schuette campaign last week accused the Democratic Governors Association of lying in a new television ad that features residents with pre-existing conditions asking Schuette to “stop attacking our health care.” 

"Gretchen Whitmer's political machine is trying to scare people by playing games with their health care and their lives," Schuette strategist John Sellek said in a statement.

Democrats note Schuette has not taken sides in a Texas lawsuit that could undo health care protections for people with pre-existing conditions. The Trump administration has joined the legal fight to eliminate the requirement.

Haveman, who also served as state health director under Republican Gov. John Engler and as a health adviser in Iraq under President George W. Bush, called the Healthy Michigan program one of Snyder's most important achievements as governor.

But he also credits Whitmer with helping secure votes in the Senate despite deep divides on other issues. The 2013 legislation passed the GOP-led Senate with votes from eight of 26 Republicans and all 12 Democrats.

 “It’s made a huge difference in the health care of adults, and it’s been an asset to the hospitals," Haveman said. "It’s revolutionized things in Michigan, and if it wasn’t for the Democratic caucus, this would not have happened.”

While Whitmer was attacked from the left in the Democratic primary as the only candidate who did not call for a state or national single-payer health care system, Schuette and allies have attacked her from the right over supportive single-payer comments made by her running mate.

“What they really want is a government-dominated health care system," Schuette said. "I want to make sure the people get to choose their doctor.”