MICHIGAN’S MEDICAID EXPANSION: Making the Law Work for Consumers
On September 16, 2013, Governor Rick Snyder signed historic, bipartisan legislation to expand Michigan’s Medicaid program. The law will save the state roughly $1 billion dollars over the course of a decade by using additional and more generous federal matching funds to replace state revenues for healthcare services. More that 400,000 Michigan residents will be eligible for coverage if they fall below 133% of the Federal Poverty Level (FPL) (roughly $15,200 for an individual). The legislation was a huge victory for some of Michigan’s most vulnerable and a step in the direction of lowering healthcare costs and improving access to coordinated care. And for the first time, it Medicaid eligibility will be determined by a simplified income formula that opens the doors to coverage for single, childless adults without disabilities.
What Happens Next?
While consumer advocates cheered Michigan’s Medicaid Expansion, they remain concerned about some provisions as passed. Namely, the legislation requires the State of Michigan and the Centers for Medicare and Medicaid Services (CMS) to complete agreements for two waivers (agreements) that would allow Michigan to deviate from standard Medicaid rules and policies. The first waiver is mostly concerned with requiring cost-sharing provisions for Medicaid beneficiaries, e.g. co-pays for medications, services, etc. The second waiver would allow Michigan to limit Medicaid Expansion eligibility to 48 months for many individuals. The first waiver is the focus of this document.
- Cost-sharing for the low-income Medicaid population is difficult to design and can create barriers to the enrollment and retention of beneficiaries. Potential enrollees may have little experience with these requirements and fear entering the system if they know additional payments will be required at a future date. Under certain circumstances, cost-sharing requirements can violate federal law.
- The law’s requirement to use Health Savings Account-like (HAS) tools to fund and pay for cost-sharing requirements will create administrative burdens for both consumers and state agencies. It is easily conceivable that the cost of administering the cost-sharing requirements will outstrip the revenue generated by cost-sharing, making the requirement a money loser for the state.
- Many in the newly eligible Medicaid population are unbanked and have few ways to fund HSA-type accounts and interact with formal financial systems.
- Complex and burdensome cost-sharing requirements may cause consumers to alter their healthcare behavior to save money, compromising the proper management of chronic conditions, for example, and impairing the system’s ability to lower costs through better disease management.
- Cost-sharing requirements will require some individuals to continue the difficult process of establishing their eligibility for disability-based Medicaid, making the goal of simplified and less expensive eligibility determination, application, and enrollment further out of reach.
In the coming days, the state will continue drafting waiver language for submission to federal authorities at CMS. After the waiver application is submitted to CMS, a public comment period will begin. Michigan Consumers for Healthcare and its member organizations are in regular communication with state and federal authorities and national consumer advocates with deep knowledge of the waiver process. We will keep you updated as the situation is clarified and provide resources to assist coalition members to participate in the comment period, as well as other advocacy actions as they arise.