AARP AARP States Michigan Advocacy

Delay on Medicaid expansion could cost state, consumers

Michigan Capitol summer

From the Detroit Free Press

LANSING— Getting the expansion of Medicaid passed in the state Senate Tuesday night was a huge victory for Gov. Rick Snyder, state health officials and, ultimately, nearly 500,000 low-income Michiganders.

But the failure of the Senate to vote to give the bill immediate effect, thus delaying the implementation of the law until April 1, could cost the state and individuals hoping to qualify for Medicaid coverage dearly.

(AARP Michigan supports the Healthy Michigan bill and is confident the legislation will be on track to take effect Jan. 1.)

Many mandates of the federal Affordable Care Act, including the one requiring Americans to have health insurance, kick in on Jan. 1.

The state will lose out on $7 million a day — or more than $600 million — from the federal government to get people onto and using the Medicaid coverage. And low-income individuals who won’t be able to get insurance until the bill becomes law, will face penalties for failing to have insurance by Jan. 1. That tab: $95 a month for singles and up to $285 a month for a family.

“As of Jan. 1, $7 million a day is available to Michigan to implement the Healthy Michigan plan, which we will not be able to collect,” said Jim Haveman, director of the Department of Community Health. “You can multiply and that becomes a lot of money.”

In addition to the lack of money, the people eligible for the coverage won’t be able to get it until the spring.

“We’ll have 320,000 who can’t get coverage and they’ll be subject to the penalties,” said Angela Minicuci, spokeswoman for the department.

The Medicaid expansion would extend to people who fall within 133% of the federal poverty level and would be fully paid for by the federal government through 2017. The federal contribution would drop to 90% by 2020. The expansion would open up the program to many low-wage earners — the so-called working poor — who currently have no health insurance.

But there is a remedy.

The Senate could reconsider the immediate-effect vote that failed Tuesday night before sending it to the state House for concurrence next week, Senate Majority Leader Randy Richardville, R-Monroe, said.

“We can bring this back up and ask for immediate effect at any time,” he said. “But I never thought this would be easy.”

And it wasn’t.

The Senate was sharply divided — all 12 Senate Dems supported the measure, as did a handful of their GOP counterparts, reluctantly — on the federally funded Medicaid expansion for 320,000 low-income Michiganders next year and 470,000 people by 2020.

The Senate met for eight hours Tuesday, mostly behind closed doors, with passions running high, before the first vote was taken. The bill needed 20 votes to pass. And it appeared headed for a 19-19 tie, with Lt. Gov. Brian Calley prepared to cast the tiebreaking vote in favor of expansion. But Sen. Patrick Colbeck, R-Canton, an ardent opponent of the measure, abstained, leaving the measure one vote shy at 19-18.

But the Senate immediately voted to reconsider. The second vote was 20-18 in favor after Sen. Tom Casperson, R-Escanaba, switched his vote when an amendment was added saying hospitals can’t charge Medicaid patients more than 115% of what they charge Medicare patients.

The Senate then voted on giving the bill immediate effect. It needed a two-thirds majority, or 26 votes, to do so. The vote was 24-14. Without an immediate-effect designation, the bill will not go into effect until 90 days after the Legislature adjourns for the year.

“This is just a delaying tactic. Let’s get this done already,” said Gilda Jacobs, president of the Michigan League for Public Policy, which advocates for vulnerable state residents. “The Legislature should not be making people’s lives more difficult. They should be doing anything they can to help them through this process.”

The state is already behind on the Medicaid expansion because it needs to get a waiver from the federal government on two provisions of the bill: setting up a health savings account for Medicaid recipients for co-pays and other medical costs, and language that allows people to either stay on Medicaid or switch to a health care exchange after 48 months. That waiver is expected to take 120 days, which puts the state right at the Jan. 1 deadline.

The Michigan Consumers for Health Care is one of four agencies that got federal grants to help people enroll in both health care exchanges and Medicaid benefits. The immediate-effect delay for Medicaid benefits is creating uncertainty and confusion on how to proceed, said Don Hazaert, executive director of the group.

“We don’t know if we’ll be allowed to enroll people ahead of time for Medicaid, so they’re covered when it goes into effect in the spring,” he said. “The easiest resolution would be for the Senate to come back and vote again on this.”

Snyder agreed, noting the feds may make some accommodations for the state.

“But when the dust all settles, I hope people will look at that and ask themselves, ‘Should we really wait three more months,’ ” he said.

Welcome to AARP Michigan
Contact information and more from your state office. Learn what we are doing to champion social change and help you live your best life.