Two Democratic-led Senate committees in June adopted a report projecting that the U.S. House Republicans’ proposed Medicaid reforms will create a $2 billion hole in the state budget and drop more than 500,000 beneficiaries due to new paperwork or eligibility obligations.
The report was adopted by the Senate Health Policy Committee, as well as the Senate Appropriations Subcommittee overseeing Michigan’s Department of Health and Human Services. For Sen. Kevin Hertel (D-St. Clair Shores)’s health policy committee, the report was accepted into the panel’s record through an unopposed motion without a roll call vote.
Meanwhile, for Sen. Sylvia Santana (D-Detroit)’s appropriations subcommittee, the report was adopted along partisan lines.
While speaking to MIRS, Santana confirmed the report was more about raising the alarm around the potential impacts of restricting Medicaid on the federal level, as opposed to auditing how the state spends its Medicaid funding.
The report highlighted that on average, Medicaid patients make up 22 percent of hospital patient volume in Michigan. Before the state expanded Medicaid eligibility under Republican Gov. Rick SNYDER, childless adults in the state could earn no more than 35 percent of the Federal Poverty Level (FPL) to receive some Medicaid benefits.
In 2014, it was offered to all adult Michiganders earning under 139 percent FPL, with the report noting that uncompensated hospital care fell by more than 50 percent at the time.
State-level opponents to the U.S. House’s Medicaid plans disagree with their new verification and eligibility instructions.
Such things include new work or volunteer requirements for childless and “able-bodied” recipients, capping states’ ability to generate more Medicaid funding through “Provider Tax” practices and enforcing that Medicaid eligibility be re-evaluated every six months instead of annually.
“Why would you put more burden on a department to administer a program that ultimately is not going to give you any variation in results?” Santana said. “Medicaid is a lifeline for our constituency, that is their access to care, and we need to continue to make sure we support that regardless.”
The report adopted by Democrats notes that estimated implementation costs in Michigan would be $155 million, with “frequent churn caused by paperwork issues” disrupting care continuity, hindering access and leaving “individuals vulnerable during medical emergencies.”
According to DHHS, one in six Medicaid enrollees live in rural areas and 17 percent have three or more chronic conditions. Furthermore, Medicaid covers 37 percent of births, 22 percent of Michiganders 19 to 64 years old, 52 percent of working-age adults with disabilities and 65 percent of nursing home residents.
Ahead of the report being adopted, Sen. Jim Runstad (R-White Lake) – who also chairs the Michigan Republican Party – titled it “a partisan hack job.” He argued to MIRS the report left out audits of improper Medicaid payments made under the state’s administration of the program.
For example, in March 2022, the Office of the Auditor General – legislators’ auditing arm over the executive branch – reported how, in Fiscal Year 2019, inaccurate eligibility determinations and failure to maintain documentation resulted in an estimated $2.3 billion lost to improper Medicaid payments.
He talked about how the plan adopted in May by the U.S. House Republicans would require verification that childless adults are working, volunteering or participating in educational programs for at least 80 hours monthly to receive coverage. The plan features certain caregiver, pregnancy and postpartum and disability-related exemptions.
“This is a popular program to say that in order to get this benefit paid by the taxpayer, you have to do the bare minimum, some community service…if you have a drug addiction, you have to go and get some treatment,” Runestad said. “We would get better care, more care for the truly needy, if we didn’t have people gaming the system.”
Sen. Michael Webber (R-Rochester Hills), Hertel’s minority vice chair, made a motion for the Senate Health Policy Committee to vote on SB 414 and SB 415, ensuring Medicaid coverage for group prenatal care services. The motion failed by a party-line.
Webber said Hertel’s committee has spent a lot of time discussing an issue that state lawmakers frankly don’t have a lot of control over.
“Meanwhile, there’s something concrete that we could be doing in the committee. There are bipartisan bills gathering dust that could help with the Medicaid population here in our state,” Webber said.
Hertel said he would be happy to schedule a hearing on SB 414 and SB 415 for another day, but the stakeholders for or against such reform were not there today because it was not on the posted agenda.
Returning to the points that Runestad made about work obligations, Sen. Jeff Irwin (D-Ann Arbor) – who sits on Santana’s subcommittee – said the U.S. House’s political goal was to say poor people are lazy and don’t deserve help.
“This report documents how the state will have to spend tens of millions of dollars in additional bureaucratic costs. So what Congress is doing is they are increasing Michigan’s overhead, increasing the amount of money spent on bureaucracy and decreasing the amount of money that actually goes to care for people,” Irwin said. “People end up getting kicked off of Medicaid who are eligible, and then they end up calling the department, calling the county, calling our offices.”
He said when preventive care is denied, the same people still show up in the emergency department, “and we all pay more anyway and the outcomes are worse.”
This story appears courtesy of MIRS, a Lansing-based news and information service.