Editorial: Take honest look at Medicaid costs
As a numbers guy, Gov. Rick Snyder can surely see the rising costs of the state’s Medicaid expansion. The governor has defended the Healthy Michigan program as a model for other states, but now the program expansion across the country has prompted questions from a Republican U.S. senator.
Sen. Ron Johnson of Wisconsin is asking Snyder and a handful of other governors to explain the status of their programs. Johnson serves on the Senate Budget Committee.
Johnson wrote the governors a letter late last month requesting information as to whether the Medicaid expansion under Obamacare was outpacing anticipated enrollment, and consequently racking up more expense for both the federal government and the states.
The governors of California, West Virginia, Illinois, New York, Ohio, New Hampshire and Hawaii got similar letters.
Michigan was one of 31 states and Washington, D.C., that took the feds up on their offer to expand Medicaid. Snyder joined only a few other Republican governors, including John Kasich of Ohio, in making this deal. Nineteen states — Texas and Florida among them — refused.
For Snyder it was too good a deal to pass up, as the federal government financed all of the costs of the expansion for the first few years. States now gradually have to start covering a portion of the cost, with a cap of 10 percent.
The Healthy Michigan program has proven much more popular than anticipated. The state had projected 477,000 would enroll by the end of 2015. That number jumped instead to 664,400 low-income residents.
One of Johnson’s concerns is that states are classifying enrollees incorrectly, since the feds cover more of the Obamacare Medicaid expansion costs than traditional Medicaid recipients.
Johnson points to federal data showing a growth in new Medicaid spending in Michigan to $3.3 billion in 2015 from $1.5 billion in 2014. And state HHS officials have confirmed Healthy Michigan enrollee costs jumped 23 percent from 2014 to 2016.
Those additional costs will inevitably weigh down the Michigan budget and are set to keep increasing. In most states, Medicaid is already one of the largest drains on state budgets, with 20 percent of the U.S. population enrolled in the program.
Angela Minicuci, a spokeswoman with the state Department of Health and Human Services, says the department is still working on providing answers to Johnson’s questions.
“At this point, the most we can say is that Sen. Johnson’s calculations about the Healthy Michigan plan are incorrect and we feel that it has provided much more value to the state of Michigan than his letter assumes,” Minicuci said in a statement.
In his letter to Snyder, Johnson wrote: “I am seeking to better understand these rising costs and higher-than-expected enrollment, especially in states where costs are increasing especially quickly. Has Michigan taken any steps to control these costs and, if so, what are those steps?”
Johnson is right to ask these questions, and we join him in awaiting the state’s response.