A health trade organization’s leader said state lawmakers have the opportunity to create policies and enact legislation to help healthcare and provider communities following the signing of the One Big Beautiful Bill Act (OBBBA).
Michigan Health and Hospital Association (MHA) CEO Brian Peters said during a virtual press call this morning that one issue comes from restrictions on a state’s ability to tax healthcare providers to finance the state’s Medicaid costs that aren’t covered by federal dollars.
However, he said one of the steps the state could take is to use state resources and dollars to fund Medicaid to make up for what is lost by the moratorium on new or increased provider taxes.
Peters said provider tax plans and state-directed payment plans have been critically important for funding Medicaid patients’ care.
“The fact that this program was characterized as waste, fraud and abuse in the conversations leading up to final passage is mind-boggling to me, and we take great issue with that,” Peters said.
Using other state resources to make up for the loss of Medicaid funding from healthcare provider taxes is not a reasonable expectation in the near term unless the state dramatically increases taxes, Peters said. With the bill having been signed into law, Peters said he’s looking down the road at a new Congress and at a new presidential administration that could reverse or mitigate some of these cuts.
Peters also said joining the multi-state nurse licensure compact, participating in the 340 B drug pricing program and medical liability reform could provide relief to Michigan hospitals.
“This coalition and other groups are going to be working overtime at looking at where those opportunities may present themselves, so not unwinding or reversing course on some of these things that (are) going to become the law of the land, but let’s add new policies, new funding that could help to support the folks who are trying to create access in our communities throughout the state,” Peters said.
Michigan Department of Health and Human Services (DHHS) Director Elizabeth Hertel said she believes there are ways to implement some of the policies in the OBBBA with minimal disruption for people who have covered services, especially if the disruption is caused by administrative burden.
The latest cost estimate from the Congressional Budget Office says that the OBBBA would cause $1 trillion in federal Medicaid spending over the next 10 years, and Peters said that translates to over $6 billion in losses for Michigan hospitals alone.
Medicaid is the largest health insurer in Michigan and covers 2.6 million people, or about 25 percent of Michiganders, and in rural communities that number is up to 40 percent of Michiganders.
“The state cannot absorb these losses, and we will have to make significant cuts in other critical areas,” Hertel said. “Someone who is uninsured doesn’t stop getting sick, doesn’t stop needing lifesaving care and doesn’t stop needing medications to control chronic conditions.”
Medicaid recipients who lose or have reduced coverage will end up waiting longer to see a doctor when they’re sick, which can cause the condition to worsen and necessitate more expensive care, like emergency care. Healthcare providers will still need to cover those costs, which will lead to increased costs for everyone, including those with private or employer-sponsored coverage, Hertel said.
“When a hospital or provider limits services or closes, they don’t stop seeing patients who have Medicaid, they stop seeing everybody who lives in or visits that community,” Hertel noted.
Another issue raised in the press call was that of Medicaid work requirements, which the bill text for HR 1 calls “community engagement requirements” that begin in 2027.
These requirements include 80 hours of work, community service, work programming, or at least half-time enrollment in an education program. Eligibility can also be met by a combination of those options for a total of 80 hours per month, according to Sec. 71119.
Naomi Lopez, an adjunct scholar at the Mackinac Center for Public Policy, said in a blog post today that the new Medicaid work requirements are misunderstood and stated that it applies to able-bodied adults without dependents under age 13, and does not apply to seniors, pregnant women, caregivers or disabled people.
Lopez wrote that 20 hours of “qualifying activity” would be required per week, with exemptions for hardship, illness, caregiving responsibilities and more.
“This is not some Draconian mandate. It’s a basic engagement requirement that asks those who can participate to take small, steady steps toward greater independence,” Lopez said.
Peters said while these changes won’t go into effect until 2027, their impacts can’t be addressed overnight, and hospitals will begin setting their plans into motion as soon as possible.
Monique Stanton, president and CEO of the Michigan League for Public Policy, said that even though the timeline doesn’t start until 2027, people may start thinking now that they’re no longer eligible for benefits, and she wants people to know they don’t have to stop depending on Medicaid prematurely.
Additional work requirements and bureaucratic hoops for recipients of Medicaid won’t prevent paperwork issues that lead to improper payments, Stanton said.
Sharon Watson, a Medicaid recipient and mother of three, said her husband’s plan was to serve 20 years in the military, which would have provided the family healthcare coverage, but he became disabled from his service and was honorably discharged in 2015.
Monitoring her husband’s care as well as care for a child with an anaphylactic food allergy that has led to hospitalizations and one with epilepsy has been equivalent to multiple full-time jobs in the past, and she’s spent countless hours filling out, collecting and submitting documents to ensure her family receives the necessary care to meet their medical needs.
Her son, who has epilepsy, had a catastrophic seizure in 2016 that required three doses of rescue medication and a hospital stay. He also requires EEG monitoring two or three times per year to make sure seizures aren’t going undetected.
The overnight EEG monitoring costs at least $10,000 and the medication for her son is about $4,500 per month, but that cost rushes towards $9,000 per month when including other family members’ medical needs.
“There’s no way a family in our position or honestly, any but the wealthiest families would be able to afford care like this,” Watson said. “.. Medicaid is what provides a hope and a future for my family. Without this, my middle son might not be alive. My other children would be sick a lot of the time, None of them might be able to attend school, I wouldn’t be able to work.”
Jennifer Middlin, another Medicaid recipient, said four months ago she was in a severe car crash and subsequently diagnosed with a traumatic brain injury, and a week later, she lost her job. The single mother of three said she is unable to work and needs extensive rehabilitation, speech therapy and occupational therapy, and all of those things are predicated on insurance coverage.
“My recovery time is measured in years, not months, and I don’t know what that means for me in the future,” Middlin said. “Until 4 months ago, I was a six-figure-earning professional. I was productive. I was a member of lots of different groups and organizations. I was busy, and now I can’t do anything.”
Middlin said previously, the only insurance she ever had was employer-sponsored plans, but this one evening in her life has upended everything.
“The only security I have left is Medicaid to get the care I need,” Middlin said.
This story courtesy of MIRS, a Lansing-based news and information service.