On Medicaid Expansion, Michigan GOP Gov. Snyder Will Need Legislature's Support

Gov. Rick Snyder said that he unconditionally supports expanding the state's Medicaid rolls, but the legislature -- which includes many skeptics of anything associated with the federal Affordable Care Act -- will have to be convinced.

By Kathleen Gray and Robin Erb

Nearly a half million more low-income Michiganders who are currently uninsured would be eligible for Medicaid-funded health care if Gov. Rick Snyder gets his way.

But it's not a done deal yet.

In what would be a huge boost for the state's neediest people -- particularly low-income adults who don't fit into any of current eligibility categories -- Snyder said Wednesday that he unconditionally supports expanding the state's Medicaid rolls by roughly 470,000 people. There are 1.9 million people receiving benefits now.

"We're all here to support expanding Medicaid," Snyder said at a news conference called by a large coalition of groups that support the expansion. "We're moving forward with care for people who need it."

But Snyder's support, which he announced the day before he will unveil his 2014 fiscal year budget, does not automatically translate into an expansion of the federal program. The Legislature, which includes many skeptics of anything associated with the federal Affordable Care Act, will have to be convinced that the expansion won't drain the state's coffers when federal support starts to drop in 2017.

"The federal government has a history of working with states to start long-term programs while providing only short-term funding, and then sticking state taxpayers with the future financial liability that program creates," said Ari Adler, spokesman for House Speaker Jase Bolger, R-Marshall. "We simply want to make sure we have the answers we need before making any decisions."

The expansion would be part of the federal Affordable Care Act -- often referred to as Obamacare -- which expands coverage to people within 133% of the federal poverty level: $11,490 for a single person without children, and $23,550 for a family of four, as described by 2013 standards.

The federal government has promised to totally fund the expansion for three years. But then the federal support will decline over several years to 90%. The state will have to pick up the remaining 10%, which could run $150 million-$200 million a year, estimated state Sen. Roger Kahn, R-Saginaw Township, the chairman of the Senate Appropriations Committee.

But Snyder offered a way to save for those years.

The state currently provides mental health services to about 50,000 uninsured, low-income residents at a cost of about $280 million a year from the state's general fund. Under the Medicaid expansion, those mental health services would be paid for by the federal government. Snyder is suggesting that half of the state's savings from no longer having to pay for those mental health services be set aside into a "health savings account," and used to pay the state's share of the costs when federal funding begins to decline.

When he makes his budget presentation at 11 a.m. today, Snyder is to include $103 million to be put in this health savings account.

"This is all about providing better care at a lower cost," Snyder said.

In his budget message, Snyder also is expected to detail his plans to raise more than an additional $1 billion a year to fix and maintain the state's roads and bridges; call for increased funding for early childhood education, and announce millions for emergency dredging to counter low Great Lakes levels. This is all while adding $50 million-$100 million more to the state's rainy day fund.

The Medicaid announcement was cheered by supporters across the state. Snyder will have to get as much bipartisan support as possible to overcome expected opposition from some Republicans, who hold a majority in both the House and Senate.

House Minority Leader Tim Greimel, D-Auburn Hills, applauded Snyder's support of the expansion and called on both Republicans and Democrats to support the plan.

"Accepting federal help to make health care accessible to more Michiganders was obviously the right choice," he said.

Among the other backers was the Michigan State Medical Society.

"The bottom line is everyone deserves good quality health care," said Kenneth Elmassian, the group's president. "As physicians, we know that those without insurance frequently delay their care and they end up sicker. Prevention, early detection and treatment are far better prescriptions."

Snyder's support "really is a big deal," said Marianne Udow-Phillips, director of the Ann Arbor-based Center for Healthcare Research & Transformation, which concluded that Michigan would save more than $1 billion in the next 10 years as the federal government picks up the cost for health care for those not currently covered by insurance.

"What's really powerful about this is that the governor did come at this from a very objective, analytical approach," she said. "He looked at the facts, he pulled research from our center and ... lots of people."

Support even came from unlikely corners. Rob Fowler of the Small Business Association of Michigan, said his group didn't support the Affordable Care Act, but came to the conclusion that expanding Medicaid was actually a benefit for those who already have insurance, too.

"People get care, and if they can't pay for it, they still get the care, and it becomes uncompensated care. Then that cost finds its way into base rates for everyone else who pays for insurance," he said. "This will be much better for people who have had those costs shifted to them for many, many years."

Paul Propson, executive director of Covenant Community Care and a member of the Michigan Primary Care Association, said of the 10,000 patients served by Covenant's five locations in Detroit and Royal Oak, about 6,000 don't have insurance. Their care is currently picked up, in large part, by the state. Expanding Medicaid not only will shift costs to the federal government, it will improve care for those patients who now feel they can seek treatment only in crises -- when care is most expensive, he said.

"We just will be able to provide better care and get access to specialty care and more rapid treatment, and they can afford their medicines without worrying that they might lose their home," he said.

But Dr. Richard Armstrong, a general surgeon in Newberry and chief operating officer of the anti-health care reform group Docs4PatientCare, called the governor's decision "a colossal mistake."

Expanding Medicaid simply grows a broken system, he said. "I have no problem with taxpayers paying money (for health care) for people who are truly disabled and truly poor," he said.

But people don't understand the economics of health care reform and that the cost for Medicaid expansion is borne by taxpayers, Armstrong said.

"I've gotten so blunt about it sometimes, I've taken my wallet out and said, 'It comes from here,' " he said.

(c)2013 the Detroit Free Press

Caroline Cournoyer is GOVERNING's senior web editor.