Healthy Michigan Plan second waiver

Background

To implement the Healthy Michigan Plan, the state’s expansion and modification of the Medicaid program under the Affordable Care Act, the state law required the Department of Health and Human Services (then the Department of Community Health) to obtain two waivers (permission to implement programs in new ways usually through the use of a new policy or procedure not currently permitted) from the federal government. The first waiver was approved on December 30, 2013, and continues through December 31, 2018. Provisions of the first waiver:

  • Changed the way copays were calculated and collected, but not the amounts that otherwise would have been collected;
  • Established protocols and procedures for healthy behavior activities and incentives;
  • Required beneficiaries with incomes between 100% and 133% of the federal poverty level (FPL) to contribute 2% of family income to help pay for services, with an opportunity to reduce the payment, based on “healthy behaviors”;
  • Guaranteed that no one would lose eligibility for failure to pay copays or the income-based payment but that consequences for nonpayment would be established.

Second Waiver Content

The second waiver is expected to be more difficult to obtain as it is not clear if there is a federal waiver option that meets the requirements of the state law and does not violate federal law or regulation. The state law specifies that enrollees who have been covered by the Healthy Michigan Plan for 48 cumulative months and have incomes between 100% and 133% FPL must choose to:

  • Remain in the Healthy Michigan Plan with higher cost-sharing—increased from the current 5% to 7% of family income (the current federal maximum is 5%)—with the income-based payment increasing from 2% to 3.5%, again with the opportunity to reduce through “healthy behaviors,” or
  • Enroll in coverage through the federal Health Insurance Marketplace and receive federal premium subsidies and cost-sharing reductions. These individuals may lose the additional services (e.g., dental, nonemergency transportation, enhanced mental health benefit) provided by the Healthy Michigan Plan that are not included in Marketplace insurance plans.

Potential Number of Beneficiaries Impacted by Second Waiver

  • The Healthy Michigan Plan law specifies individuals who have been covered by the plan for 48 cumulative months and have incomes between 100% and 133% FPL are impacted by the second waiver, but the law does not specify if the enrollee must have had income over 100% FPL for each of the 48 months.
  • On a monthly basis, about 15% to 18% of the enrollees have incomes over 100% FPL and could potentially be impacted by the second waiver. The remaining 82% to 85% of enrollees in the Healthy Michigan Plan would not be impacted but would lose their coverage if the second waiver is not approved and the Michigan Legislature does not act to continue the program.
  • With enrollment hovering around 600,000 individuals, just over 100,000 have incomes over 100% FPL, while just under 500,000 individuals have incomes at or below 100% FPL.

 Actions to Date

  • A concept paper was submitted to the federal government on May 27, 2015.
  • Discussions have occurred and continue between federal officials and state policymakers.
  • A public hearing was held in June with public comments due to the state by July 31, 2015.
  • The second waiver request was formally submitted to the federal government on September 1, 2015.

Impacts of Waiver Inaction or Rejection

  • The current state law calls for the Healthy Michigan Plan to end on April 30, 2016, and about 600,000 Michigan residents would lose their healthcare coverage even though the waiver provisions apply only to those with incomes between 100% and 133% FPL.
    • Letters must be sent to ALL beneficiaries by January 31, 2016, notifying them the program will end on April 30, 2016.
  • The first beneficiary cannot reach 48 months of enrollment until April 2018, 48 months after the implementation of the Healthy Michigan Plan, but without approval of the second waiver, the program would have been terminated two full years before the first beneficiary could have met the criteria in the second waiver.

Options to Continue the Healthy Michigan Plan Without an Approved Second Waiver

  • The Legislature could modify the Healthy Michigan Plan law to meet the conditions required by federal law and regulation.
    • Amending the law would have to be completed quickly (in as short a time as one month, and prior to January 31, 2016) to ensure enrollees are not notified the program is ending and create chaos.
  • The Legislature could modify the Healthy Michigan Plan law and simply strike the requirement of the second waiver and all related provisions.