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What's happening with Medicaid in Michigan

Photo courtesy of the Snyder administration.

The Michigan Legislature is getting closer to approving a state spending plan.

On Wednesday, the state Senate passed a education funding bill. And after lawmakers come back from the Mackinac Policy Conference, a broader budget is slated to pass next week.

But so far, debate on proposed appropriations have been mostly divided on party lines.

One issue on the partisan divide: Medicaid expansion under the Affordable Care Act.

The federal healthcare law called for broadening health insurance coverage to low-income adults — including some 400,000 in Michigan.

Out of 30 Republican governors, only six supported the expansion. Gov. Rick Snyder was one of them.

"Expansion will create more access to primary care providers, reduce the burden on hospitals and small businesses, and save precious tax dollars,” Snyder said in a press release in February. "This makes sense for the physical and fiscal health of Michigan."

Credit The Advisory Board Company
The Advisory Board Company
States and their plans for healthcare expansion. Gov. Rick Snyder does support Medicaid expansion, but the Republican-controlled state legislature doesn't.

But federal funding for the expansion of Medicaid has been left out of the Republican-supported budget, running counter to Snyder’s recommendation.

Now, as the proposed budget makes its way through the Senate to Snyder’s desk, the fate of the expanded health coverage remains in limbo.

Medicaid expansion in Michigan isn’t dead yet — but securing expanded health coverage may prove to be difficult.

Instead of including the federally-backed Medicaid expansion into the state’s budget, House Republicans introduced a bill that would allow for increased Medicaid coverage, but only if the federal government concedes on some specifics.

The most significant change under the bill: limiting Medicaid coverage to 48 months for “nondisabled adults.”

Credit Gallup
The uninsured population of the U.S. by state, ranging from a low population without insurance to high.

Under the original federal law, insurance through Medicaid is guaranteed to citizens between the ages 19 and 65 who earn up to 133% of the poverty level, regardless of disability status.

The federal government agreed to pay 100% of the costs associated with the Medicaid overhaul until 2017, and then 90% there on out.

Since the Republican-backed limited Medicaid plan would require federal funding to get off the ground, the legislation needs the approval of the Obama administration. But as the bill stands, experts doubt the executive branch will support the changes.

“The limits on coverage are almost certainly going to be rejected by the federal government,” said Dean Smith, a professor in the Department of Health Management and Policy at the University of Michigan.

To date, no other state has elected a cutoff point for coverage.

"If Michigan doesn't elect the Medicaid expansion as it stands, hundreds of thousands of low-income families would continue to be uninsured."

If the plans are indeed scrapped on the federal level, Michigan might not see any expanded Medicaid coverage at all.

“If Michigan doesn’t elect the Medicaid expansion as it stands, hundreds of thousands of low-income families would continue to be uninsured,” said Karen Pollitz, a fellow with the Kaiser Family Foundation, a health policy group.

This raises concerns regarding the healthcare law's tax penalty provision, which mandates that citizens without health insurance pay a $95 fee for non-enrollment in 2014.

The fee increases each year after the law's implementation. 

But Pollitz says that without Medicaid expansion, those who would've fallen under the expanded Medicaid coverage will likely not to be charged, since the available subsidies on the federal healthcare exchange might not be steep enough to make coverage affordable.

“If the least expensive insurance option exceeds 8 percent of someone’s taxable income," — which may be the case for many uninsured Michiganders without the Medicaid expansion — "they won’t be penalized,” said Pollitz.

“But they won’t be insured either.”

Here's a map from the Mackinac Policy Center, highlighting just how many uninsured Michiganders are expected to enroll in Medicaid healthcare if the expansion passes in the state.

- Melanie Kruvelis, Michigan Radio Newsroom

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