Editorial: Feds should let Michigan innovate
The Affordable Care Act faces enough trouble without placing at risk a health care program that works. Michigan’s response to Obamacare is working, and should be allowed to continue to serve 600,000 residents.
Healthy Michigan was the compromise solution Gov. Rick Snyder put in place after the state Legislature refused to approve a state insurance exchange as outlined by the Affordable Care Act’s requirements.
It allowed Michigan to use federal funds to expand Medicaid coverage to thousands more low-income residents. Most other states controlled by Republicans rejected both the state exchanges and the Medicaid expansion.
Healthy Michigan turned out to be a success, surpassing enrollment estimates. It also contains innovative features to encourage personal responsibility, proving the benefit of allowing states more room to craft health insurance programs outside the strict boundaries of Obamacare.
But because it didn’t stick strictly to the letter of the Affordable Care Act, Michigan needs a federal waiver to keep the program going, and the Centers for Medicare and Medicaid Services in Washington is balking. Unless the waiver comes, 600,000 Michiganians risk being tossed off Medicaid.
That threat comes at the same time a U.S. Supreme Court case challenges the legitimacy of giving insurance subsidies to residents of states that haven’t created their own exchanges. If the ruling goes against the Obama administration, it could effectively end the Affordable Care Act in its current form.
So why court extra trouble?
Michigan’s solution works, and it is right for the state. The waiver is necessary to continue Michigan’s unique cost-sharing program, a key addition in getting the program narrowly through the Legislature in 2013.
The state program provides Medicaid coverage to residents with incomes between 100 percent and 133 percent of the poverty level, or roughly $12,000 for a single person.
It differs from federal guidelines in that it requires residents to share the cost of the coverage, a provision added by the Legislature to cushion the cost impact when the federal subsidies start phasing out in 2017. Michigan got a federal waiver to charge recipients 3-5 percent of their income for coverage, depending on their earnings. For a resident earning $12,000 a year, the contribution is $360 annually.
The second waiver requires recipients to make a choice after 48 months on the program to either purchase their own Obamacare policy or start contributing 7 percent of their income to remain on the Healthy Michigan plan. That exceeds the federal guideline capping contributions at 5 percent of income.
Skeptics predicted that the personal responsibility requirements of Healthy Michigan would discourage residents from enrolling.
But that prediction has proved untrue. The program is popular, and is meeting the needs of Michigan residents, while buffering the state somewhat from runaway costs.
Washington should not mess with Michigan’s success. It should issue the waivers Michigan needs to keep its residents healthy.