From Gongwer News Service

Michigan’s Medicaid expansion program, Healthy Michigan, has kept health insurance premiums lower overall and has fostered health care innovation, particularly in terms social factors of health, but the legislation that enacted the program has a grave defect that could cost the state the overall benefit of the program, a report by the Citizens Research Council said.

 The report said the Legislature’s requirement that the Healthy Michigan plan end if the state incurs more costs than savings ignores wider overall savings the state can see through Healthy Michigan in terms of improved general health, lower overall insurance costs and reduced costs from uncompensated care.

AARP Michigan is strongly supportive of Healthy Michigan.

 If Healthy Michigan were eliminated, “viable options (of comparable cost and quality) to insure the population served by the Healthy Michigan plan are not readily apparent,” the report said. Expanding Medicaid to cover individuals whose incomes are 133 percent of the poverty level was included in the federal Patient Protection and Affordable Care Act passed in 2010, and the report said not one of the 19 states that did not expand Medicaid created “superior” systems, either private or public, to help the working poor get access to health insurance.

 Healthy Michigan was enacted in 2013 and took effect in 2014. More than 650,000 individuals are covered under the plan, which exceeds the forecasted number of persons the state anticipated getting coverage.

 One major cost effect of the program, along with expanded health insurance generally under the ACA, is reduced uncompensated care costs for hospitals. In 2013, according to the report, the state saw nearly $900 million in uncompensated hospital costs. By 2015, that had fallen to $400 million.

 More significantly, the program’s focus on wellness and improving health – by having recipients take an active role in engaging in healthy behaviors such as exercise or quitting smoking – is leading to an overall healthier state. The report acknowledged the direct evidence of that is as yet unclear, but improved access and use of medical services in dealing with chronic health conditions, detecting diseases, cutting down on unnecessary deaths and improving individuals’ financial condition are factors that do improve overall state health.

 When enacting the program, the Legislature held that it would end if costs outweighed savings. With an increasing amount of funds required from the General Fund to pay for the program, the state will likely hit that mark by 2021 or 2022.

 But the report said the “kill switch” provision “abdicates the Legislature’s core oversight duties. A unidimensional cost-savings criteria is bad policy, from the standpoint of efficiency, cost-benefit analysis would consider the broad impact of the program, not solely direct savings to the state budget.”

 Healthy Michigan does cost billions of dollars, and while that may justify finding ways to cut costs, the report said, limiting who gets insurance is not necessarily the best proposal. The state could look at other factors such as why insurance costs are too high, as well as improving employment, education and public health and curbing poverty, all of which could and would cut public spending on health care and health insurance, the report said.

 

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