Michigan's CARES Act aid ranks near bottom of nation when rated by COVID-19 cases
The state of Michigan will receive $3.9 billion in direct federal aid as part of the $150 billion federal stimulus package passed in March to help address coronavirus-related expenses, but the amount dwindled when measured by the number of COVID-19 cases or deaths.
Michigan’s allocation ranked in the top 10 among the states, but it got relatively little considering the number of known cases of COVID-19 that Michigan has reported — a figure that topped 45,000 this week.
Michigan comes in near the bottom of the rankings at No. 44 among the states when measured by the number of positive tests for the COVID-19 virus ($87,119 per positive test) and No. 46 when measured by the number of COVID-linked deaths in the state ($925,773 per death), according to an Associated Press analysis.
States with less severe outbreaks got a disproportionately large share of the grant money, according to the analysis.
Part of the issue is the formula for dispersing the money included a floor amount of $1.25 billion per state, regardless of the state's population or how hard it was hit by the coronavirus.
States like Wyoming, which had 604 cases of COVID-19, got an allocation that breaks down to more than $2 million per positive test of COVID-19. Alaska got $3.4 million per positive test, though it has reported 368 cases.
Wyoming's $1.25 billion allocation is equal to 80% of the state's annual general budget, according to the Associated Press.
The country's hardest-hit states, New York and New Jersey, received about $24,000 and $27,000, respectively, for each positive coronavirus test.
Other states with high numbers of cases, including Massachusetts, and Illinois, received less than $100,000 per positive case, according to the AP's analysis.
U.S. Sen. Gary Peters, D-Bloomfield Township, said that’s part of what happens when a federal formula includes a minimum amount for each state, regardless of its size. He blames that on the Senate’s “natural bias” toward small, rural states.
“Rural states have a disproportionate influence in the U.S. Senate because each state gets two senators, and a large number of states are rural with low population and few states have very high population, so it’s not unusual to see that kind of outcome,” Peters said.
About $800 million of Michigan's total will go to five local units of government with populations exceeding 500,000 — Detroit and the state’s four largest counties, said Kurt Weiss, a spokesman for the state budget office.
Some uncertainty remains about what the state may use its remaining $3 billion on, which is more of a focus for state officials than the amount it received, Weiss said.
Discussions are ongoing in Washington, D.C., to amend the CARES Act funding so states can use it on expenses for which they had already budgeted — expenses the state may not be able to meet because of decreased tax revenue during the pandemic.
“…under the current language, federal funds can’t be used to back fill revenue losses or support existing state costs, which is the No. 1 thing we need,” Weiss said in an email. “The need for Congress to provide additional direct support to state and local governments is critical.”
The Michigan Health & Hospital Association said the most recent round of CARE Act funds to hospitals appeared to be more fairly distributed because it was based on the number of COVID-19 patients rather than patient revenue.
In the most recent allocation to hospitals announced Friday, 30 Michigan “high-impact” hospitals will receive a little more than $900 million because they cared for more than 100 COVID-19 patients through April 10 and $95.6 million for care to low-income and uninsured patients.
Of the $95 million allocated to the 30 Michigan hospitals caring for low-income patients, roughly $41.3 million will go to hospitals in Wayne County. It's not yet clear what the specific breakdown will be for the major Detroit hospitals.
In addition, 249 rural hospitals and health clinics will receive $326.1 million through the CARES Act allocations to rural hospitals.
During the first distribution of CARES Act funding to hospitals in March, the distribution formula “unfairly penalized” state hospitals, “despite having one of the highest numbers of cases in the country,” said Ruthanne Sudderth, a spokeswoman for the Michigan Health & Hospital Association.
“The methodology used patient revenue; Michigan hospitals are paid well below the national average as a percentage of Medicare, largely due to our payer mix and many efficiencies our members have adopted over the years,” Sudderth said in an email.
But, she said, “we’re encouraged to see some of the more recently announced allocations be targeted toward those hardest hit by the virus as well as rural hospitals.”
The Associated Press contributed.