Michigan’s bumpy road to expanding Medicaid

August 28, 2013

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.

Days until marketplaces launch: 34.

Michigan's Medicaid expansion not yet a slam dunk (Charlie Neibergall / Associated Press)
Michigan's Medicaid expansion not yet a slam dunk (Charlie Neibergall / Associated Press)

Late Tuesday evening, Michigan's Medicaid expansion nearly came down to a single vote.

Or, more accurately, the lack of a single vote.

State Sen. Patrick Colbeck, a Republican from the city of Canton, refused to vote on legislation to expand the state's Medicaid program under Obamacare. He opposed the bill, and his refusal, under Michigan's legislative rules,  prohibited the lieutenant governor from casting a 20th vote to move the it forward.

Jake Neher, a state capitol reporter for the Michigan Public Radio Network, grabbed a shot of the vote count at 5:24 p.m.:


But that was hardly the end of night: After caucusing with their parties, the Michigan Senate came back into session to pass the Medicaid expansion on a 20 to 18 vote. That makes Michigan the 25th state to sign up for the health-law expansion. The state expects that 470,000 people will gain coverage.

The Michigan Medicaid expansion survived a whole lot of politicking and wrangling to land on the desk of Gov. Rick Snyder's desk, who is almost certain to sign it (Snyder, a Republican, has aggressively advocated expanding Medicaid for months now).

This is a huge accomplishment for Snyder, who aggressively pushed legislators to implement the health-care law, to little avail. He supported the creation of a state-based marketplace but couldn't persuade the legislature to move forward on a bill that would authorize such action.

At the same time, all the political wrangling suggests that Michigan's implementation of the Medicaid expansion might be a bit bumpier than other states. Michigan is both starting at a later date and requesting waivers from the federal government that it may not receive.

For one, the Medicaid expansion won't start on Jan. 1 in Michigan, the day that most of the health-care law's other programs kick in. After passing the Medicaid expansion, a Senate vote failed that would have allowed the legislation to take effect immediately.

That means, according to state house reporter Jonathan Oosting, that the bill cannot take effect until April 1.

"The way it is right now, it doesn't take effect until April 1, so as of January 1, seven million dollars is available to Michigan to implement the Healthy Michigan plan, which we will not collect," Jim Haveman, who runs the state's Medicaid program, told Oosting.

In Michigan, then, there will be different start dates for the expansion of private insurance and the expansion of Medicaid, which could confuse consumers trying to sort out their options under the law.

Michigan has also made an unusual proposal on how to run its Medicaid program, which would take effect in 2015 and require a waiver from the federal government to move forward.

The state wants to treat people who have been on Medicaid for four years differently than those who have used the program for a shorter amount of time. Upon hitting the four-year mark, Medicaid enrollees would have two options: switch to a private health plan on the marketplace or stay in Medicaid and have their share of costs increase to as much as 7 percent of their income.

These aren't things that typically happen under Medicaid. States rarely change benefit eligibility based on time in the program, according to Joan Alker, executive director of Georgetown's Center for Children and Families. Medicaid usually limits cost-sharing to 5 percent of salary, and waivers tend to be held to a relatively high bar.

"I don't think the administration would be enthusiastic about time limits," Alker says, "And in general they don't like exceeding the cost-sharing limit. There are a  lot of murky questions."

What the administration does like, though, is states expanding Medicaid, which makes Alker think they'll figure out some way to sort through the proposals and arrive at a policy that works for the state and the feds. She also points out that these changes wouldn't come into effect until 2015, which means that there's space to start signing people up before hashing out the details on this specific point.

"I think the governor is very serious about getting to yes, and the administration is too," she says. "These aren't going to be insurmountable."

 KLIFF NOTES: Top health policy reads from around the Web. 

The Obama administration is delaying a health marketplace deadline. "The U.S. Department of Health and Human Services (HHS) notified insurance companies on Tuesday that it would not sign final agreements with the plans between September 5 and 9, as originally anticipated, but would wait until mid-September instead, according to insurance industry sources." David Morgan and Caroline Humer in Reuters. 

Bill Clinton will start promoting Obamacare next week. "Former president Bill Clinton will speak about President Obama’s signature health care law at an event Sept. 4 in Little Rock, Ark. Clinton will address Obamacare and health care policy in general at a speech at the Clinton Presidential Center, according to the Clinton Foundation. The foundation says Clinton will speak about 'the critical role a high quality, affordable and accessible health care system plays in the United States and any country’s economic and social well being.'" Juliet Eilperin and Aaron Blake in the Washington Post.

Americans don't like Obamacare. They like defunding Obamacare even less. "To be clear: There is no doubt that for a sizable portion of the Republican base Obamacare has become a symbol of the sort of government-will-solve-all-problems approach they believe this administration (and Democrats generally) have taken. Getting rid of it has become more cause than political calculation. For some of the conservatives leading the defund charge, there are individual political upsides to staying on the issue." Chris Cillizza and Sean Sullivan in the Washington Post

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