Action needed for 600,000 Michiganians to keep health coverage

Added May 11th, 2015 by Jan Hudson | Email This Entry Email This Entry
Jan Hudson

The Healthy Michigan Plan, Michigan’s Medicaid expansion, has been in the news recently both because of its unprecedented enrollment success, and because for the program to continue, state law requires approval of a new federal waiver. Without the waiver, the Healthy Michigan Plan ends April 30, 2016 under current law and 600,000 Michigan residents lose their healthcare coverage.

The Healthy Michigan Plan law specifies that:

    • The state must apply for a federal waiver by September 1, 2015, to:
      • allow increased total cost sharing for enrollees between 100% ($11,770 for individual or $24,250 family of four) and 138% ($16,243 individual or $33,465 family of four) of the Federal Poverty Level to remain in the Healthy Michigan Plan after 48 cumulative months of enrollment. The current limit is 5% of family income, the state law requires an increase to 7% of family income, with the income-based payment increasing from the current 2% to 3.5% of family income, or
      • allow enrollees to choose a Marketplace plan (less comprehensive coverage and more cost) with federal subsidies after 48 months of cumulative enrollment in Healthy Michigan Plan.
    • The waiver must be approved by December 31, 2015 for the program to continue, not just for this subset of the program, but for all program enrollees.
    • If the waiver is not approved, the program ends on April 30, 2016, TWO FULL YEARS BEFORE ANY HEALTHY MICHIGAN PLAN ENROLLEE COULD EVEN BE IMPACTED BY THE HIGHER COST SHARING.

The required federal waiver mandates cost sharing to increase to 7% of family income, which is above the current federal maximum of 5%. If a federal waiver is approved, enrollees would have the choice of remaining in HMP with higher potential cost sharing, or move to a Marketplace plan with federal subsidies. Due to the cost-sharing reduction opportunities in the HMP, it is possible that enrollees would not reach the 7% of family income.

Cost-sharing reductions of 50% of the income-based payment and 50% of copays are possible for enrollees who complete a Health Risk Assessment and agree to address at least one healthy behavior. Healthy behaviors to be addressed include: physical activity, nutrition, alcohol, tobacco, substance use, mental health issues, and flu vaccination. At this time, it is too early to know how many individuals will reach the current cost-sharing limits, and far too early to predict how many might be impacted by an increase to 7%.

Based on current enrollment, the second waiver likely would impact only a small percentage of total program participants, about 20% at most, as demonstrated by the chart below.

The actual impact of the waiver will be even smaller than 20% of enrollees because all of the individuals with incomes greater than 100% of poverty for this period will not necessarily have income greater than 100% FPL or participate in the program for 48 cumulative months.

While discussions between Department of Health and Human Services and federal officials have begun, very little information is being shared publicly, as options are explored. It is not yet clear if there is a federal waiver option that will meet the requirements of the state law and not violate federal law. Federal officials reportedly are trying to find a solution to maintain coverage for 600,000 low-income individuals.

If there is not a federal waiver solution, state lawmakers have the option of modifying the state law to allow 600,000 of their constituents to maintain their healthcare coverage. It would be a travesty to pull the rug out from under these individuals just at the time when they have begun to take control of their health.

The increased cost sharing will impact a very small portion of the enrollees, while termination of the program will impact about 600,000 residents.

The big question is whether Michigan has the political will to preserve this successful program if a federal solution cannot be found, or will Michigan lawmakers sit idly by and blame the federal government for ending the program when they could act to save it for their constituents.

Now is a good time to start talking with lawmakers to let them know how essential and beneficial this program is – share one of the 600,000 success stories with them.

 — Jan Hudson

One Response to “Action needed for 600,000 Michiganians to keep health coverage”

  1. […] of “keeping us healthy,” it is essential that federal and state policymakers work together to enable the Healthy Michigan Plan to continue. State officials are currently in discussion with federal officials to try to work through policy […]

Leave a Reply