State officials anxious about health care court ruling

Chad Livengood
Detroit News Lansing Bureau

Lansing — State health officials will closely monitor the U.S. Supreme Court’s impending ruling on the legality of the federal health insurance marketplace as it could affect the structure of Michigan’s expanded Medicaid program.

The Legislature’s 2013 Medicaid expansion law calls for about 100,000 recipients earning between 100 percent and 133 percent of the federal poverty level to choose between paying higher cost-sharing to stay on Medicaid after four years or buy subsidized private insurance on the federal marketplace.

If the high court invalidates the exchange, that could leave Michigan’s program in limbo, said Jackie Prokop, director of the state’s Medicaid program policy division.

“It’s really hard to speculate right now because we don’t know what the Supreme Court ... is going to rule,” Prokop said Wednesday at a state meeting on the Medicaid program. “ ... We are concerned and we are watching it closely.”

In King v. Burwell, the Supreme Court is expected to rule within the next week on whether tax credits for individuals to buy health insurance plans on the federal marketplace exchange are legal.

A decision in favor of the challengers could lead to the loss of insurance subsidies for 6.4 million Americans in 34 states, including 228,000 in Michigan, that did not create their own state-based health insurance marketplace under the Affordable Care Act of 2010. Congressional Republicans are considering stop-gap measures if the high court invalidates the tax credits.

Michigan’s expanded Medicaid program faces another looming hurdle: federal approval of the higher cost sharing requirement the Republican-controlled Legislature mandated as part of the 2013 Medicaid expansion law.

If the federal Centers for Medicare & Medicaid Services doesn’t approve higher costs for the 100,000 recipients earning more than federal poverty level, then the 600,000 low-income Michigan adults on the “Healthy Michigan” Medicaid plan would lose coverage on April 30 next year, Prokop said.

“There’s a lot at stake with this waiver,” Prokop said Wednesday.

Michigan Department of Health and Human Services officials held a public meeting Wednesday to give an update on the agency’s plans to pursue a legally-required second waiver with the federal government to continue the expanded Medicaid program.

For the group of 100,000 Medicaid receipts earning between $11,770 and $15,654 annually for an individual, the state law requires their contributions to the cost of Medicaid insurance coverage increase from 2 percent of their annual income to 3.5 percent.

The law also requires total cost-sharing to increase from 2 percent of their income to 7 percent to cover the cost of the insurance coverage and nominal copays for prescription drugs, doctor’s visits and hospitalization.

Medicaid recipients can get their cost-sharing assessments reduced if they undergo a health risk assessment with a doctor and agree to healthier habits, such as routine exercise or quitting smoking.

As of March, 181,510 of the new Medicaid recipients — or 30 percent — had completed a health risk assessment and got their cost-sharing amount lowered during the first year of the program, according to a state report.

State officials have until Sept. 1 to submit a request to the federal government to waive the normal Medicaid program restrictions prohibiting cost-sharing to exceed 5 percent of a recipient’s annual income, Prokop said.

If the waiver is not approved by Dec. 31, the expanded Medicaid insurance program known as the “Healthy Michigan Plan” would end April 30, 2016, Prokop said.

Former state Rep. Matt Lori, one of the sponsors of the 2013 Medicaid expansion law, attended the hearing Wednesday. He now is a health care reform administrator at DHHS.

Lori, a Republican from Constantine in southwest Michigan, said lawmakers added the higher cost-sharing requirements “to make sure that this isn’t a benefit people are going to get for nothing.”

But if the federal government doesn’t grant Michigan a waiver, the Legislature will be under political pressure to prevent the 600,000 low-income adults from being thrown off the Medicaid rolls, Lori said.

“I would certainly think that would be a factor,” Lori said. “It’d be something I’d think about.”

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