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Lansing — Fearing more than 100,000 people could lose insurance coverage, Michigan’s health and human services director privately pushed Gov. Gretchen Whitmer’s administration to do what could be seen as an end-around the Legislature to suspend Medicaid work requirements, according to emails obtained by The Detroit News.

The law passed last year by the Republican-controlled Legislature requires able-bodied adults participating in Michigan's Medicaid expansion program for low-income residents to work 80 hours a month, get job training or pursue formal education to keep their health coverage.

The emails show Robert Gordon, director of the Department of Health and Human Services, encouraged Whitmer to somehow delay the Republican-passed law, a move that could have further rankled relations with GOP leaders on the state budget and road funding.

Gordon said in an interview last week that it's possible more than 100,000 people could lose their health insurance after the requirements take effect in January.

“The biggest win in DHHS would be suspending work requirements, not moving this or that money,” Gordon wrote administration officials at the end of September in emails obtained under a Freedom of Information Act request. “That will be tough, but I think it can fit into the narrative on Monday.”

Gordon was referring to Sept. 30, the day Whitmer announced $947 million in vetoes to Republican lawmakers’ approved state budget. It was a day before Whitmer outlined $625 million in transfers within the budget. Among them, Whitmer announced transferring $15.1 million to help with putting in place the work requirements.

The Democratic governor didn’t announce a suspension of the requirements even though she opposed them during the 2018 campaign — in part because she didn't have the authority. Unlike some states where the executive branch has the power to delay legislatively approved work requirements, Whitmer couldn’t unilaterally suspend the requirements in Michigan without legislative action, Gordon said.

A Whitmer effort to delay the state’s work requirements would amount to an “abuse of executive power,” said Tony Daunt, executive director of the conservative Michigan Freedom Fund. 

“If they don’t like it, go to the Legislature and try to convince them to change it,” Daunt said.

The Department of Health and Human Services under Gordon has sought to use executive powers to push policy changes. On Friday, the agency said it made an error and would delay a change announced Oct. 17 allowing more Michigan residents to receive food and cash assistance — from Nov. 1 to Dec. 1 — to comply with state law. 

In December 2018, the federal Centers for Medicare and Medicaid Services approved an extension of Michigan's program, known as the Healthy Michigan Plan, with the addition of the work requirements. The health coverage is extended to those with incomes at or below 133% of the federal poverty level, which is about $33,000 for a family of four.

Michigan and Indiana are the only two states set to implement work requirements in January, Gordon said.

Shirkey: First, make rules work

A spokeswoman for Senate Majority Leader Mike Shirkey, R-Clarklake, who last year sponsored the bill for work rules, contended Gordon should make a good-faith effort to ensure the requirements work. In 2018, Shirkey said the work requirements would improve the lives of Healthy Michigan Plan recipients while keeping the program sustainable as federal aid for it drops to 90% by 2020.

“Work requirements go into effect in January,” Shirkey spokeswoman Amber McCann said in an email. “The majority leader is of the opinion that the department should first work to implement requirements and prepare recipients for compliance before declaring failure.”

Shirkey worked with Democrats this year to pass a bill to make it easier for Whitmer’s administration to implement the work requirements and for recipients to comply with them, McCann added.

The bill, which Whitmer signed, moved the deadline for recipients to report their work from the 10th day of the following month to the last day of the following month. Recipients also will be able to prove they are in compliance at a later date if they miss the initial deadline.

But opponents of the work requirements argue that they already have enough information to indicate the requirements are going to cause problems.

In Arkansas, about two-thirds of the people who had to regularly report on their work to comply with that state’s requirements lost coverage, Gordon said. Based on what’s happened in other states, he said it’s possible that more than 100,000 people could lose coverage in Michigan despite the administration’s efforts to prevent it.

“I think it would be disastrous,” Gordon told The News. “Health coverage means people get the health care they need for chronic conditions, they get preventative care to avoid conditions that otherwise become life threatening and they have the financial security that comes from knowing that when something awful happens they can get health coverage and afford it.”

In February 2019, Manatt Health, a New York-based health care consulting group, estimated that 61,000 to 183,000 Healthy Michigan recipients could lose coverage over a one-year period under the work requirements. The projections were made based on the Arkansas experience and adjusted for Michigan provisions, according to the consulting group.

Healthy Michigan currently enrolls nearly 655,000 beneficiaries.

The new work rules could apply to roughly 540,000 able-bodied adults, according to the nonpartisan House Fiscal Agency, which last year projected about 5% to 10% of recipients will drop out or leave the program as a result. But it couldn't apply the results of Arkansas' experience because the data weren't yet available.  

The Michigan Chamber of Commerce last year urged Shirkey and other lawmakers to make changes in the "out of control" Medicaid expansion, noting the program's unexpected explosion in recipients and potential underfunding as federal subsidies decline. 

A requirement in state law — negotiated in 2013 to get GOP support — requires the Medicaid expansion insurance program to end if the state’s spending exceeds the program’s savings. Republican former Gov. Rick Snyder said last year when he signed the work requirement law that it would ensure the continued operation of Healthy Michigan, one of his signature achievements. 

More than 680,000 mostly lower-income residents have enrolled in the government health insurance program since its launch in 2014, far surpassing the original projection of 470,000. Total Michigan enrollment in Medicaid tops 2 million.

Add more exemptions?

Gordon said he’s not aware of any change of heart in the Republican-controlled Legislature on the work requirements. But there could be other steps the administration could take outside of the Legislature.

“We’re always thinking about it,” Gordon said.

The steps could limit coverage losses but could further division between the administration and GOP lawmakers.

The Whitmer administration has to save as many people’s coverage as possible while contending with the Legislature and the requirements of the law, said Samuel Bagenstos, a disability rights attorney and a professor at the University of Michigan.  

Bagenstos, who ran for the Michigan Supreme Court in 2018 as a Democratic nominee, floated the idea of administratively adding automatic exemptions to increase the number of Medicaid recipients who don’t have to comply with the requirements each month.

“It’s still going to be tens of thousands of people who are going to be thrown off Medicaid, I think, for bad reasons,” Bagenstos said. “So it is dire.”  

He noted that New Hampshire’s Gov. Chris Sununu delayed his state’s Medicaid work requirements to give the state more time to implement them. Arizona also this month temporarily suspended its work requirements.

“The question is, has the Legislature, in particular the previous Legislature, and former Gov. (Rick) Snyder, tied Gov. Whitmer’s hands so they can’t do that,” Bagenstos said. “That’s a difficult legal question here.”

Disabled residents, pregnant women, full-time students, children and one parent in a household with a child under the age of 6 are exempt from the work requirements. 

Michigan’s work mandates are expected to face a legal fight. There have already been legal challenges to similar policies in Arkansas, Indiana, Kentucky and New Hampshire, arguing the work rules reduced access to Medicaid without sufficient legal reasoning.

Michigan's law could face the same challenges, said Jesse Cross-Call, senior policy analyst with the Center on Budget and Policy Priorities, a Washington, D.C., group that works to reduce poverty and inequality. 

"Michigan has one of the more punitive work requirement proposals out there," said Cross-Call, who added, "The reporting requirements are very burdensome.”

Bagenstos said a Michigan-specific case wouldn’t surprise him. In emails, Gordon also predicted a “coming lawsuit."

"The coming lawsuit ... will soon force an up-down stance anyway," Gordon told other administration officialsin an email dated Sept. 27.

cmauger@detroitnews.com

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