The Medicaid Expansion in Michigan Needs to Get Done Now

June 17, 2013

Editor’s Note: This column previously appeared in Bridge Magazine.

On February 6, 2013, Governor Snyder announced his support for expanding Medicaid as envisioned in the Affordable Care Act. In his announcement, he talked about how the expansion would help hundreds of thousands of people in Michigan (our own estimates at the Center for Healthcare Research & Transformation put the numbers at approximately 290,000 in 2014 and 620,00 by 2020). He called the current way many Michiganders get health care—through the emergency room once they are already sick—as a “dumb way of doing business.” And, he described the Medicaid expansion in terms that business leaders can relate to. He said:

It’s all about saving money by being smarter.

When uninsured people go to the emergency room for non-emergency care instead of seeing a primary care doctor—it costs hospitals millions each year in uncompensated costs. By expanding Medicaid, people will have access to primary care doctors, saving Michigan hospitals those uncompensated care costs.

Job creators, too, will see savings with this law. Under the Affordable Care Act, they’re required to either provide health care for their employees or pay a significant penalty. Many businesses have said they can’t afford the costs—that they’ll have to shut their doors. By expanding Medicaid, we can provide an affordable option that will help businesses stay open while offering employees affordable health care.

Remarkably, expanding Medicaid is one public policy that business leaders, health care providers, consumer groups and the public at large all strongly support. On the day of the Governor’s announcement, Rob Fowler, president of the Small Business Association of Michigan (generally considered a conservative group), was at the Governor’s side. Since that time, chambers of commerce around the State have endorsed the concept and the Michigan Chamber has testified in favor of the expansion. Public opinion polls similarly show that Michigan citizens are also overwhelmingly in favor.

So where does the Medicaid expansion in Michigan stand now? Mired in the political process—a process that doesn’t seem to be reflecting the views of any major constituent group, the public or the multiple independent economic analyses that have been done about this expansion and its benefits to the state.

The Governor has been working hard to get this done and take advantage of the millions of dollars in federal money that the expansion would bring to the state to improve the health of Michigan citizens and the state’s business climate. He has renamed the expansion the Healthy Michigan program to signal a different type of approach. He has agreed to establish some level of cost sharing in the program so recipients do more to participate in their own care, and he has offered to work with legislators on creative approaches to wellness in Medicaid. He has not supported legislators’ ideas of limiting coverage to 48 months—an idea that health care providers and business leaders also don’t support—because it is unlikely to pass federal scrutiny and doesn’t make sense when it comes to an insurance market or how health care utilization actually works.

There appears to be only a minority view in the state that expanding Medicaid would not be good for Michigan. And, every year of delay costs Michigan millions. The 100 percent federal financing of Medicaid is only good for 2014, 2015 and 2016. If Michigan misses the 2014 window, we permanently lose out on one year of 100 percent federal funding even if we decide to expand Medicaid later.

There have been some recent promising developments in the state House. The core question is: do these signs show that the full legislature is ready to support the Governor’s Medicaid plan? Or will legislators instead be driven by a minority view that ignores one of the state’s most diverse coalition of stakeholders all united in support of the Governor on this issue?