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Medicaid Expansion in Michigan and the Challenges that Will Inevitably Remain

It is common to find in life that many disparate people, communities, businesses, and societal interests share the self-professed desire to reach the very same destination, yet often disagree how to get there. Thus it is with health care and […]


It is common to find in life that many disparate people, communities, businesses, and societal interests share the self-professed desire to reach the very same destination, yet often disagree how to get there. Thus it is with health care and the means of providing access to it. Near universal agreement exists across the political, business, medical, and faith communities that all people have a right to access quality medical care. Yet, strong disagreement persists on the best legislative, market, and government avenues to secure that access.

Michigan Governor Rick Snyder’s February 5, 2013 announcement that he would support Medicaid expansion for Michigan citizens under the federal Patient Protection and Affordable Care Act (“Affordable Care Act”) again reignited this running debate. The outcome of Governor Snyder’s push for Medicaid Expansion will have an enduring impact not only on Michigan’s fiscal health but also on the health of hundreds of thousands of Michiganders and the medical providers that care for them. What does prospective Medicaid expansion mean for Michigan’s health care industry and what does it mean for the fiscal health of our state? Even if the Michigan legislature consents to Governor Synder’s Medicaid expansion quest, the facts show that there will still remain much work to be done to protect the vulnerable and insure that the current projected 1.2 million uninsured Michiganders have access not only to insurance but, more importantly, to quality care.

If Michigan chooses to accept Medicaid Expansion under the Affordable Care Act, a new group of Michiganders will become eligible for Medicaid benefits: those who are under the age of 65 and living at or below 133 percent of the Federal Poverty Level (FPL). The federal government under the Affordable Care Act will pay the costs of this new benefit for Michigan for the first three years. Subsequently, Michigan, like other states, would be obligated to pay ten percent of the new health benefit’s costs with the federal government paying the remaining 90 percent. In tangible numbers, as many as 600,000 Michiganders are projected to newly enroll into Medicaid by 2020 (a mere seven years away) should the legislature concur with Governor Snyder’s Medicaid quest.

Proponents of the Governor’s push assert that Michigan could experience a total net savings of over 1 billion from 2014 to 2019. Further, they assert that the state’s hospitals could significantly reduce its approximately $1.8 billion in uncompensated care that reportedly include $804 million in Medicaid payment shortfalls. Furthermore, as the Center for Healthcare Research & Transformation notes, some studies suggest the seemingly intuitive conclusion that Medicaid insurance coverage improves the physical health outcomes of recipients compared to those who remain uninsured.

Conversely, the drawbacks for some constituencies in Michigan include the projection that Medicaid Expansion could cost Michiganders $ 1.3 billion from 2017 to 2022.

Additionally, for many, further relying on federal and state funds for an increased percentage of the population’s health needs risks many of the concerns surrounding the underlying Affordable Care Act: unfunded liabilities, perverse government incentives for maintaining Medicaid eligibility, private medical providers who are unwilling to treat Medicaid eligible patients. Opponents assert that Michigan has no business further entangling itself with a wasteful and inefficient federal program, that Michigan will end up being on the hook for this new entitlement with no federal help to pay for it, and that generally, there are just other more innovative avenues for taking care of the medically vulnerable than simply radically expanding a federal entitlement.

Some of these assertions are value statements that depend on your partisan bent while some of those concerns will only be borne out in the execution, efficiency, and effectiveness of the administration of Medicaid Expansion should the State go for it. However one feels, even if Medicaid Expansion goes through, it is likely that 500,000 to 600,000 Michiganders will remain uninsured, access to primary care physicians and medical professionals will still be a serious problem for Michigan’s working poor and homeless, and that letting the market alone or government alone handle the long-term health care crisis will only exacerbate these underlying problems. To wit, regardless of the fate of Medicaid expansion in Michigan, the State will continue to desperately need innovative non-ideological solutions to maximize health access and financial sustainability for the poor, medical providers, and for the State at large.

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[1] Gray, Kathleen; Erb, Robin, Michigan GOP governor proposes Medicaid expansion, USA Today (as published in the Detroit Free Press), February 6, 2013, available at http://www.usatoday.com/story/news/politics/2013/02/06/michigan-governor-medicaid-expansion/1896637/.

[2] Anders, Melissa, Michigan hospitals push for Medicaid expansion, health care exchange, mlive.com, March 11, 2003, available at http://www.mlive.com/business/index.ssf/2013/03/michigan_hospitals_push_for_me.html .

[3] Mann, Cindy, director, Center for Medicaid and State Operations, letter to State Health Care Officials and State Medicaid Directors re: New Option for Coverage of Individuals under Medicaid, April 9, 2010.

[4] Gray, Kathleen; Erb, Robin, Michigan GOP governor proposes Medicaid expansion, supra.

[5] Id.

[6] Udow-Phillips, Marriane; Fangmeier, Joshua; Buchmueller, Thomas; Levy, Helen, Center for Healthcare Research & Transformation, The ACA’s Medicaid Expansion: Michigan Impact, October, 2012, at p. 2, available at http://www.chrt.org/assets/price-of-care/CHRT-Issue-Brief-October-2012.pdf .

[7] Udow-Phillips, Marriane; Fangmeier, Joshua; Buchmueller, Thomas; Levy, Helen, Center for Healthcare Research & Transformation, supra, at p. 5.

[8] Anders, Melissa, Michigan hospitals push for Medicaid expansion, health care exchange, mlive.com, supra.

[9] Udow-Phillips, Marriane; Fangmeier, Joshua; Buchmueller, Thomas; Levy, Helen, Center for Healthcare Research & Transformation, supra, at p. 6.

[10] Heritage Foundation, Medicaid Expansion in Michigan: Impact and Cost to Taxpayers ; citing Holahan, John et al, the Urban Institute, “The Costs and Coverage Implications of the ACA Medicaid Expansion: National and State-by-State Analysis, “ Kaiser Foundation, November 2012, available at http://www.kff.org/medicaid/upload/8384.pdf.