More than a half million Michigan residents will get to keep their expanded Medicaid health insurance next year and beyond after the federal government Thursday approved the final waiver required under state law.

Under terms approved Thursday by the federal Centers for Medicare and Medicaid Services, starting in April 2018 about 110,000 participants in the Healthy Michigan Plan will be required to adopt healthier behaviors or be kicked off the expanded Medicaid program.

More than 600,000 residents have enrolled in Healthy Michigan since it was adopted by the state Legislature in 2013. Michigan had until Dec. 31 to obtain federal approval for a second and final waiver required or the program would end. A first waiver was approved in December 2013.

The latest waiver requires people with incomes between 100 and 133 percent of the federal poverty level, or about $12,000 annually for an individual, to work with their physicians to make a healthy behavior change, such as increasing exercise, improving their diet or quitting smoking. Those who don’t will be removed from Healthy Michigan and sent to the public health insurance exchange for coverage.

Under Michigan’s waiver application, this requirement would only have applied after a participant was on the Healthy Michigan Plan for 48 months. As approved, it won’t matter how long a person has been on the plan, said Jennifer Eisner, spokeswoman for the Michigan Department of Health and Human Services.

“The CMS approval eliminates the option for someone who has an income between 100 and 133 percent (of the federal poverty line) to stay in the Healthy Michigan Plan without committing to a healthy behavior,” Eisner said. “There is, however, a 12-month grace period for new enrollees to ensure beneficiaries are afforded the opportunity to proactively engage in a health behavior before being moved to the exchange for coverage.”

Michigan’s Medicaid expansion is unique among the states because it requires participants to share in the cost of their health care benefits. The maximum cost sharing is currently 5 percent of household income. After 48 months on the plan, the contribution can be up to 7 percent of income. But all participants can reduce their payments by adopting healthy lifestyle changes.

“Because of the enhanced focus on healthy behaviors, it would be very difficult to reach 7 percent cost sharing,” Eisner said. “The mechanics of the Healthy Behaviors Incentives Program, which allow for reductions in cost sharing, will be operationalized before full implementation in 2018, and must be submitted to (the federal Department of Health and Human Services) before the waiver takes effect.”

Healthy Michigan’s popularity has surpassed expectations, exceeding multi-year enrollment projections just months after it launched April 1, 2014.

At a Thursday press briefing, Michigan Department of Health and Human Services Director Nick Lyons said the waiver meets all of the requirements mandated by the state legislation. Asked if GOP lawmakers will agree that the waiver, as approved, follows the law, Lyons said “Yes.”

“It’s about moving people away from emergency care and into primary care,” Lyons said. “(This) helps people control or mitigate the impact of a chronic disease before it becomes (an emergency).”

The Legislature approved the expansion in August 2013 contingent on federal approval for the two waivers. Republican lawmakers insisted on the cost-sharing requirements because the federal government will gradually stop paying for all of the cost of the health coverage after 2017.

“The Healthy Michigan Plan has provided Michiganders with the opportunity to improve their health and wellness by enrolling in health care coverage,” Gov. Rick Snyder said in a Thursday statement. “I’m proud of this program, our residents, and Michigan’s continued leadership in health care innovation.

“I appreciate the work of the Centers for Medicaid and Medicare Services and thank it for its partnership and approval of our unique approach to keep Michigan moving forward.”

Since its launch, the Healthy Michigan Plan has covered more than 1.7 million primary care visits. In addition, more than 59,000 beneficiaries have received mammograms and more than 32,000 have had colon cancer screenings.

“From the beginning, the primary goals of the Healthy Michigan Plan have been to promote healthy behaviors and encourage people to lead healthy, productive lives,” Lyons said in a Thursday release. “The approved waiver goes a long way in helping us achieve those goals, and we are going to continue doing our part to ensure residents understand their benefits and how best to use them.”

Snyder signed the plan into law September 2013 to improve the health of residents, emphasize personal responsibility and reduce the cost of uncompensated care in the state.

“We are pleased that we have an agreement with Michigan that will allow nearly 600,000 low-income citizens to continue to have access to quality health services,” said Ben Wakana, spokesman for the U.S. Department of Health and Human Services. “This agreement is consistent with Michigan’s proposal and ensures important beneficiary protections guaranteed under the Affordable Care Act.”

Though critics worried that cost-sharing would discourage enrollment, Michigan’s expanded Medicaid program, called Healthy Michigan Plan, has been widely lauded as a model of reform by encouraging personal responsibility.

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