AARP AARP States Michigan

Michigan wins federal approval to expand Medicaid

medicaid expansion freep photo

From Detroit Free Press

The state of Michigan has been given the federal go-ahead to expand its own version of Medicaid — something officials hope to have in place by April 1.

The uniquely Michigan Medicaid plan, called Healthy Michigan, requires cost-sharing, unlike Medicaid programs already in place in many other states.

Most new enrollees who make between 100% and 133% of the federal poverty level must contribute up to 2% of their income to a health savings account that will be administered by the state and can be used for out-of-pocket medical expenses. The 133% income level for an individual is $15,282; for a family of four, it is $31,322.

 Additionally, nearly every participant will be required to contribute copays, which are the same now collected under the federal-state Medicaid program — $2 for a doctor’s visit, for example. However, those who do not pay the cost-sharing portion of the plan will still get medical services.

“We’re glad it happened. It was a lot of work," said Jim Haveman, director of Michigan Department of Community Health. “The legislature should be happy. This is what they worked for.”

 Michiganders should be able to start applying in about a month, he said.

“We’ve been taking this in stages, now we can move to the next sequential stage,” he said.

The approval letter for Healthy Michigan was signed by Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services.

The expansion is among the many provisions of the 2010 Affordable Care Act, or federal health reform. Under the law, states were to expand their Medicaid programs to cover residents up to 133% of the federal poverty level. In exchange, the federal government would pick up a larger portion of the costs — 100% in the first years, dwindling to 90% by 2020.

 Nearly 1.9 million Michiganders already are eligible for Medicaid. The change in income eligibility limits will open it up to another 470,000. AARP Michigan strongly supported the Healthy Michigan legislation.

The expansion was far less than certain in Michigan.

Last year, the U.S. Supreme Court ruled that states could not be penalized by the federal government if they didn’t expand their Medicaid programs.

“Ever since the Supreme Court said ... expansion is optional, states have been trying to figure out what that means,” said Matt Salo, executive director of the Washington-based National Association of Medicaid Directors.

 About two dozen states moved forward with expansion as the Obama administration had planned. New beneficiaries in those states will be covered starting Wednesday.

 But the heavily Republican legislature in Michigan balked, despite pleas from Gov. Rick Snyder. It wasn’t until late this summer — and with conditions like cost-sharing — that the plan was narrowly approved, setting off an administrative scramble to obtain federal approval.

That meant consumers were stymied when they logged onto the federal health care website,, after it went live Oct. 1 and found out they might be eligible for Medicaid. Advised they’d have to apply through the state, they were held in a sort of bureaucratic limbo.

Salo said states that have been reluctant to expand Medicaid have been watching the Michigan expansion and several others closely.

Since the Obama administration — under increasing criticism for the troubled rollout of — agreed to the Michigan conditions, other states might move ahead with expansion because they will see they can do so on their terms, he said.

Just as important, it allows lawmakers to save face as they agree to a law that so many of them detest, Salo said: “It allows them to brand this as MichiganCare or IndianaCare and not Obamacare.”

Photo by Kimberly P. Mitchell Detroit Free Press

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.