Snyder warns delegation health care bill hurts Michigan

The U.S. House Republican plan to overhaul the national health care system “will adversely impact” Michigan’s most vulnerable citizens and may lead to significant cost increases for seniors, GOP Gov. Rick Snyder said this week in letters to members of the state’s congressional delegation.

The warning comes as the House prepares to vote on the legislation as soon as Thursday, but the governor’s spokeswoman confirmed it was prepared before a substantial amendment announced Monday night.

As introduced, “the American Health Care Act shifts significant financial risk and cost from the federal government to states without providing sufficient flexibility to manage this additional responsibility,” Snyder told Michigan lawmakers in a series of individualized letters sent Tuesday.

U.S. Rep. Dan Kildee, D-Flint Township, said he received Snyder’s letter and agrees with the governor. Michigan’s GOP delegation “should oppose this bad bill,” he wrote on Twitter.

Snyder, who late last week joined three other Republican governors in speaking out against the plan backed by GOP President Donald Trump, is primarily concerned by proposed funding adjustments and reductions for Medicaid.

The program provides health insurance to 2.4 million low-income Michigan residents, including more than 650,000 enrolled in an expanded eligibility program created under former Democratic President Barack Obama’s signature health care law.

In his letters to Michigan lawmakers, Snyder laid out the number of Medicaid recipients in their individual districts. He included statewide figures in letters to Sens. Debbie Stabenow and Gary Peters.

The governor told Rep. Tim Walberg, for instance, that traditional Medicaid serves 1.75 million children, seniors, pregnant women and disabled individuals in Michigan, and roughly 104,000 of them live in the 7th Congressional District.

“As you know, these are our state’s most vulnerable citizens, friends and neighbors,” Snyder told the Tipton Republican. “The proposed AHCA will adversely impact them.”

Michigan’s Republican-led Legislature voted in 2013 to accept federal funding and expand Medicaid eligibility to 138 percent of the federal poverty level, but conservatives inserted a provision to end the Healthy Michigan plan if state costs ever exceed savings.

The Detroit News reported last week that the federal health care legislation would accelerate projected cost increases for the state, leading to termination of the program by fiscal year 2020, according to the Senate Fiscal Agency.

Snyder told lawmakers the federal legislation would eventually eliminate coverage for tens of thousands of individuals in each congressional districts who are enrolled in the Healthy Michigan plan as state taxpayers assume responsibility for $800 million in additional costs.

Medicaid reform is necessary, Snyder wrote, but “that reform must be approached deliberatively” to create a new system that values state flexiblity and innovation.

“If Congress moves forward in passing the proposed AHCA, which shifts financial risk to state taxpayers, my administration and the Michigan Legislature must possess the flexibility necessary to manage that risk.”

A Walberg spokesman told The Detroit News that “we agree with Gov. Snyder that Obamacare is not working and the status quo is unsustainable.”

“As was conveyed to Gov. Snyder and other governors during a number of meetings, the American Health Care Act is the first step of a three step process,” Dan Kotman said. “Congressman Walberg is committed to working at every step to shift greater control and flexibility back to the state level.”

Kotman pointed to a letter U.S. Health and Human Services Secretary Tom Price wrote to governors this month committing to “a new era for the federal and state Medicaid partnership.”

House Republicans on Monday night announced a planned amendment that would “give states additional flexibility” to manage their Medicaid programs by allowing them to choose between a per-capita allotment or block grant funding, according to an outline from the office of Rep. Greg Walden, R-Oregon, who chairs the House Energy and Commerce Committee.

The amendment would also increase the annual inflation rate for elderly and disabled patients, which House Republicans say would ensure “that Medicaid spending on our most vulnerable more accurately reflects shifting demographics due to the aging of the Baby Boomers and the practical challenges of high-fixed costs for this vulnerable population.”

States could implement “reasonable work requirements” for able-bodied adults without dependents, including employment, skills training, education or community service.

In a nod to conservative critics, the amendment would prohibit additional states from expanding Medicaid eligibility ahead of a planned phase out of enhanced funding that would begin in 2020.

Snyder’s office received the manager’s amendment late Monday night and is reviewing it, spokeswoman Anna Heaton said Tuesday. Allowing states to implement work requirements for Medicaid recipients was among a lenghty list of recommendations outlined last week by Snyder, John Kasich of Ohio, Brian Sandoval of Nevada and Asa Hutchinson of Arkansas.

In his new letter to legislators, the governor said he wants the federal government to remove “prescriptive program requirements” for Medicaid that require states to obtain waivers when implementing “innovative ideas.”

Michigan had to secure two federal waivers for its unique for of Medicaid expansion because of provisions requiring enrollees to make monthly payments into health savings accounts and complete healthy behaviors.

Snyder said he also is worried about affordability of insurance in the private marketplace, particularly for older Michigan residents.

According to the nonpartisan Congressional Budget Office, the proposal would generally allow insurers to charge older enrollees five times more than younger ones, as opposed to three times more under current law.

As introduced, the legislation would substantially reduce premiums for young adults and substantially raise premiums for older people, the CBO said in an analysis released last week.

House Republicans said the amendment announced Monday could help reduce costs for older Americans by providing states with $100 billion to design programs that meet the needs of their unique patient populations.

Prior to modifications, the CBO projected that new health care legislation would reduce federal deficits by $337 billion between 2017 and 2026, with the largest savings coming from spending reductions on Medicaid and individual insurance subsidies.

When compared with projections under current law, the CBO and Joint Committee on Taxation predicted that 14 million fewer people would be insured by 2018 and 24 million fewer by 2026.

“While reforming the nation’s health care system is vital, it is imperative that gains in health coverage and access to care are maintained,” Snyder told Michigan lawmakers. “These ideas are not mutually exclusive.”

Michigan Medicaid by the numbers

Traditional Medicaid patients: 1,751,000

Health Michigan Medicaid plan enrollment: 655,000

Traditional and Healthy Michigan: 2,406,000

Covered children, age 0-20: 1,028,000

Covered blind and disabled patients: 339,000

Source: Gov. Rick Snyder’s office