Protect healthcare for 650,000 Michiganians

pdficonApril 2017
Emily Schwarzkopf, Policy Analyst

Continuation of the Affordable Care Act (ACA) and the Healthy Michigan Plan are critical for Michigan residents and the state’s economy. In recognition of the program’s success, the governor recommended, and the League supports, sufficient funding for the Healthy Michigan Plan in the 2018 budget year.

Budget Brief JPG USE THIS ONE

Sixty percent of Healthy Michigan enrollees report that their ability to access primary care was better than prior to being enrolled, and 70% stated that they were more likely to contact a primary care provider before going to the emergency room. Eighty-six percent of enrollees have reported that their ability to pay their medical bills has improved since being enrolled in the program.

The program has also made a significant impact on Michigan’s economy. The Healthy Michigan Plan has resulted in 30,000 jobs annually, $2.3 billion in additional personal spending power, and $150 million in state tax revenue as a result of added economic activity. Further, 90% of hospitals report reductions in uncompensated care, with overall uncompensated care dropping by nearly 50% across the state.

BACKGROUND ON MEDICAID EXPANSION

When it was first passed, the ACA included a requirement that states expand Medicaid to those with family incomes at or below 133% of the federal poverty level. The existing Medicaid program generally had only covered the aged, blind and disabled up to 100% of poverty, with higher income levels for certain populations (children and pregnant women) and lower for others (childless adults).

However, the June 2012 United States Supreme Court decision questioning the constitutionality of the ACA (National Federation of Independent Business v. Sebelius) found the provision to require states to expand Medicaid unconstitutional. As a result, states were given the option to expand their Medicaid programs without penalty. State programs would be covered 100% by federal funding through calendar year 2016. The federal match rate will phase down to 90% over the next five calendar years: to 95% in 2017, 94% in 2018, 93% in 2019 and 90% in 2020 and all subsequent years.

BB Protect healtcare for 650,000 Michiganians chart 1The Healthy Michigan program has been shown to be incredibly successful for those receiving coverage through the plan. The benefits for Healthy Michigan enrollees must be based on federal benchmark coverage and include the 10 essential healthcare services. The plan also covers dental and vision services, hearing aids and nonemergency medical transportation.

MICHIGAN’S FEDERAL WAIVERS

The legislation that created the Healthy Michigan program required Michigan to get two waivers from the federal government. The first waiver allowed the state to include cost-sharing requirements (including copays) and the use of health savings accounts into which newly-eligible enrollees would contribute. The contributions of enrollees could be reduced if certain healthy behaviors are addressed.

The second waiver limited the amount of time an enrollee could be enrolled in the Healthy Michigan Plan to 48 months. Once the 48-month cap is reached, an individual would have the opportunity to remain on Medicaid with higher cost-sharing requirements or purchase private insurance through the healthcare exchange and be considered eligible for premium tax credits. Both of these waivers were approved by the federal government.

Another important component of Michigan’s legislation is that should annual state savings and other nonfederal savings associated with the implementation of the program not be sufficient to cover the reduced federal match, the Healthy Michigan program would end. The state realizes savings from programs that were previously funded either partially or entirely by the state General Fund that are now covered in Healthy Michigan, including non-Medicaid mental health funding, Adult Benefits Waiver program, prisoner healthcare costs and Plan First! Waiver program costs. Savings can also be seen as a result of revenue from the Health Insurance Claims Assessment, the use tax on Medicaid managed care organizations, provider assessments and an established hospital quality assurance assessment program retainer on special hospital payments.

CONTINUED THREATS

Despite the recent defeat of the federal American Health Care Act, there is still the possibility that Congress will fundamentally change the way Medicaid funding is allocated and limit how long Medicaid expansion will continue. As Congress moves forward on other priorities, including tax reform, there is the possibility that Congress, in order pay for tax breaks, could shift the costs of the Medicaid program to the states through block grants or per capita caps. There also is a chance that Congress could make changes in Medicaid financing in the forthcoming federal budget or when the Children’s Health Insurance Plan (CHIP) funding is reauthorized in late summer or early fall. While the League encourages the Michigan Legislature to continue funding for the Healthy Michigan Plan in 2018 and beyond, it is also important to stay vigilant in protecting Medicaid funding and the Affordable Care Act.

THE GOVERNOR’S 2018 BUDGET RECOMMENDATION

The governor’s executive budget proposal includes continued funding for this critical program. Since the state is required to pay a share of the costs, the governor has recommended total funding of $4.1 billion, including a $200.4 million investment of state General Funds to cover the costs of the state’s match contribution. This amount does not take into account additional savings from revenue impacts or other budgetary savings created as result of the implementation of the Healthy Michigan Plan.

With federal budget cuts, the sky may really be falling

My son loves books, and one of our favorite things to do every night is read before bed. Many of the stories we choose also provide a learning experience. One of our recent favorites has been Chicken Little, which I think my son chooses to laugh at me stumbling over tongue-twisting character names. It also gives us a chance to talk about thinking rationally.

This lesson is applicable from our kids to my policy work to the highest levels of government. But when President Donald Trump released his “skinny budget” in March—despite being light on detail—the potential impact it could have on our state budget and Michigan residents was stifling. And at times, I really do feel like the sky is falling.

My fear is not unfounded. Michigan has grown increasingly reliant on federal funds. Over the past decade, while our total state budget has grown by about 29%, federal funds in our budget have grown by nearly 69%. In our current budget, federal funds provide $22.7 billion of our $54.2 billion state budget. This means that more than $4 out of every $10 provided for important programs like public education, healthcare for children and families with low wages, food assistance and road maintenance are paid for by federal dollars.

Think-the-federal-budget-does-not-matter_CROP

These federal grants do matter to our state budget. According to a recent report from the Center on Budget and Policy Priorities, federal grants to states and local governments make up nearly one-third of non-defense discretionary spending. Michigan receives 3% of total federal grants to states, and only California, New York, Texas, Florida, Georgia, Illinois, Pennsylvania and Ohio get a bigger share than Michigan. Cuts to these discretionary programs, which are already at historically low levels, would harm workers, college students, local communities and families with low- and moderate-incomes.

What’s more is that this “skinny budget” proposes to completely eliminate funding for the Low Income Home Energy Assistance Program (LIHEAP), which helps families and many seniors pay heating bills; a block grant that supports housing, community facilities and economic development; the HOME program which helps develop and repair affordable rental housing and repair homes for homeowners with low incomes; and the Community Services Block Grant, which provides anti-poverty services.

While President Trump’s budget only outlines changes in discretionary spending, changes to mandatory grants may still be forthcoming, for example block granting or putting a per capita cap on Medicaid. (While the first round of the American Health Care Act was withdrawn, you can bet that Congress will try, and try again, to repeal the Affordable Care Act and alter Medicaid funding.) Changes in these programs, including Medicaid, the Children’s Health Insurance Program (CHIP), free and reduced-priced school meals, child care assistance and other assistance for families with low incomes, would mean deep cuts to these programs as states would be unable to absorb the costs themselves. This would reduce services to those Michigan residents who really need it.

Cuts to federal grants to state and local governments, and changes in federal programs, will only mean cuts to the very Michigan residents that rely on these services. Changes will result in more potholes and unsafe bridges, fewer Michigan residents with healthcare coverage, more children going hungry, less affordable housing, more poverty and more problems, all having a long-term negative impact on our economy.

So pardon my doomsday sentiment, but states really rely on federal funds to run. And these changes would affect our state for years to come. But we can change the future. It is important for all of us to get in touch with our members of Congress and tell them the things that really matter to us as they make decisions on the federal budget that will have a direct impact on our great state.

— Rachel Richards

Kresge grant helps League redefine health policy work in Michigan and Detroit

For Immediate Release
March 31, 2017

Contact:
Alex Rossman
arossman@mlpp.org
517-487-5436

$600,000 grant funded two new health policy analyst positions, helps League improve integration of state health and human services

LANSING—A $600,000 grant from The Kresge Foundation awarded to the Michigan League for Public Policy will help transform the League’s health policy work in Detroit and around the state. The funding enabled the League to hire two new health policy analysts, one focusing on Medicaid and the other specializing in the social determinants of health.

“These policy analysts provide valuable expertise regarding additional opportunities to integrate health and human services policies that will lead to great health and well-being for Michiganders,” said David Fukuzawa, managing director for The Kresge Foundation’s health and human services programs. “The League will serve as a valuable resource for Michigan’s Department of Health and Human Services as the department continues to develop integrated services for the state.”

The funding from The Kresge Foundation will support the League’s research and analysis examining the current health and well-being of Detroiters and Michigan residents. The League will identify gaps in state services and support systems and create specific policy recommendations to address those gaps. This work by the League’s two new health policy analysts will advance public policy change by supporting the integration of health and human services and helping lawmakers, state department officials and service providers better understand the connection between health and other factors.

“The Kresge Foundation has been a longstanding supporter of our work at the League, but this significant grant will help take our health policy efforts to the next level,” said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy. “We work on a variety of issues to improve the physical and economic well-being of kids and families in Detroit and around the state, and we are seeing more and more how all of these issues connect. A child’s health is directly impacted by their environment, nutrition and family’s income, and their health affects their education and future occupations and earnings. We need comprehensive strategies to tackle all of these issues, and this grant will enable us to do that.”

The League’s health policy analysts will research and write reports, analyze current and proposed policy, and work with partners, department staff and policymakers on social determinants of health and Medicaid-related issues. Emily Schwarzkopf, the League’s health policy analyst working on Medicaid, has hit the ground running as the League and our partners work to protect the Affordable Care Act and the state’s Medicaid expansion program, the Healthy Michigan Plan. Health Policy Analyst Julie Cassidy will be working on the social determinants of health, a relatively new focus of health policy work that takes a holistic approach and incorporates other needs and services.

The Kresge Foundation is a $3.6 billion private, national foundation that works to expand opportunities in America’s cities through grantmaking and social investing in arts and culture, education, environment, health, human services and community development in Detroit.

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The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

2016 Community Health Budget Continues Key Investments

 

The 2016 budget for the health programs within the Department of Health and Human Services continues key investments, and includes few of the program reductions and funding shifts recommended by the governor.

The vast majority of health funding, nearly 90%, is for the state’s Medicaid-funded programs, including the Healthy Michigan Plan and Medicaid-funded mental health and substance abuse services. In 2016, federal funds will make up over 70% of the health component of the budget.

Medicaid and Healthy Michigan Plan

Nearly one in every four Michigan residents is enrolled in Medicaid or the Healthy Michigan Plan for healthcare coverage. Implementation of the Healthy Michigan Plan together with enrollments through the Marketplace have dramatically reduced, from 14% to 7%, the number of uninsured adults in Michigan according to a survey by the Center for Healthcare Research and Transformation.

In the current budget year, the governor projects that 1.7 million Michigan residents will be covered by Medicaid, with an additional 540,000 recipients enrolled in the Healthy Michigan Plan. The governor’s proposed budget for 2016 projected a very small increase in Medicaid enrollees (about 13,000) and continued growth in Healthy Michigan Plan enrollees (40,000), bringing total average enrollment for the Healthy Michigan Plan to 580,000.

Medicaid Caseloads

The governor recommended the continuation of $100 million savings in state funds for Medicaid based on lower projections of the number of persons who will be enrolled in the current year.

  • The House and Senate concurred with the governor’s recommendation.
  • Final Budget: Based on the May Revenue Estimating Conference, the projected Medicaid caseload was increased for both the 2015 and 2016 budget years, and additional funding of $46.6 million in state funds, $190.2 million in total funds, was recommended for 2016. The Legislature adopted the consensus recommendations.

Healthy Michigan Plan Funding

The governor recommended $3.5 billion for the Healthy Michigan Plan (including behavioral health services), which is financed with all federal funds for the final year. For the program to continue after April 30, 2016, Michigan must submit a second waiver to the federal government by September 1, 2015, and it must be approved by the end of 2015. The second waiver requires increased cost-sharing for those with incomes between 100% and 133% of the federal poverty level who have been enrolled in the program for 48 months.

  • The House and Senate concurred with the governor’s recommendation.
  • Final Budget: Based on the May Revenue Estimating Conference, the Legislature increased Healthy Michigan Plan funding to $4.1 billion, all federal funds, as the caseload continues to increase.

Prescription Drugs

The governor recommended the removal of prescription drugs from Medicaid managed care contracts and the development of a separate pharmacy benefit contract. This proposal was expected to generate higher drug rebates based on higher purchasing volume, as well as administrative savings, for a total of $16.8 million in state funds.

  • House: The House rejected this proposal and retained the pharmacy benefit in the managed care contracts with changes, including the adoption of a single formulary (list of covered drugs) and shared pharmacy rebates with the state. The House assumed greater state savings of $2.0 million than did the Senate.
  • Senate: The Senate agreed with the House, but retained the Executive recommended savings.
  • Final Budget: The Legislature adopted the House recommendation.

Autism Services

The governor recommended $36.8 million for autism services, restoring the reduction made in 2015 due to the slow start of the program. The Executive Budget also recommended increasing coverage through age 21 from the current age 6. One-time funding is continued to train autism services providers through Michigan State University, Western Michigan University, Central Michigan University, Oakland University and Eastern Michigan University. Total funding for training is reduced from $7 million to $2.5 million, with $500,000 allocated to each university.

  • House: The House concurred with expansion of services to Medicaid beneficiaries through age 21, but eliminated all but $100 of the university funding.
  • Senate: The Senate concurred with the governor.
  • Final Budget: The Legislature concurred with the Senate, but moved the university funding from one-time funding to ongoing funding to eliminate the uncertainty that one-time funding creates.

Increased Payments to Primary Care Providers

The governor recommended $8.3 million in state funds ($24.2 million in total) to provide full-year funding to continue approximately half of the rate increase for primary care providers implemented in 2013 to increase access. Full federal funding for this initiative ended in December 2014, so an additional state investment is required to continue this rate increase in 2016. This critical state investment is intended to encourage primary care doctors to serve the Medicaid population, particularly with the coverage expansion under the Healthy Michigan Plan.

  • The House and Senate concurred with the governor.
  • Final Budget: The Legislature adopted the governor’s recommendation.

Adult Dental Services

The governor recommended funding, effective July 1, 2015, to develop a statewide managed care contract for dental services for adult Medicaid enrollees to increase dental access for adults. Currently adult Medicaid beneficiaries experience great difficulty finding a dental provider who will accept Medicaid. An investment of $23 million, of which $7.9 million would have been state funds, was recommended and was financed from savings in other program areas. The total annual cost of the program would have been $92 million, of which $31.7 million would be state funds.

  • House: The House included only a $100 placeholder for this initiative to ensure discussions in the joint House/Senate conference committee.
  • Senate: The Senate supported the policy but delayed implementation to September 1, 2016, to reduce the cost in budget year 2016.
  • Final Budget: The Legislature did not include funding for this initiative, instead using the funding to increase the number of children covered by Healthy Kids Dental (see below).

Healthy Kids Dental Expansion

For 2016, the governor recommended expansion of the Healthy Kids Dental program to an additional 210,000 children—ages 0 through 8—in Kent, Oakland and Wayne counties, with an investment of $21.8 million ($7.5 million in state funds). With this expansion, the program would cover over 800,000 children, but not all eligible children in the state. Yet to be covered would be more than 170,000 older children in Kent, Oakland and Wayne counties.

Michigan currently provides enhanced dental services to more than 600,000 children in 80 counties. Access to dental services is essential to prevent tooth decay, the No. 1 chronic disease in children. Healthy Kids Dental improves access to care by partnering with Delta Dental of Michigan to increase provider reimbursement rates and simplify administration. With the expansion in 2015, all counties are now covered except Kent, Oakland and Wayne.

  • House: The House concurred with the governor.
  • Senate: The Senate delayed coverage until July 1, 2016, but covered all children in Kent, Oakland and Wayne counties.
  • Final Budget: The Legislature expanded coverage to more than 290,000 children ages 0 through 12 in Kent, Oakland and Wayne counties, adding $37 million in total funds, of which $12.7 million are state funds. With the higher caseload projections, this still leaves about 130,000 children behind.

Hospital Obstetrical Services Payments

The governor recommended the elimination of $11 million in total payments, $3.8 million from state funds, to rural hospitals for the special payment implemented in the 2015 budget year for obstetrical services. To stop the erosion of obstetrical services in Michigan hospitals, the Legislature created a special payment for qualifying rural hospitals in the current budget year. Over the last few years, a number of hospitals have closed their OB units and there are now 17 contiguous counties in northern and mid-Michigan with no hospital OB units. The special payment is to stop more closures, not reopen any units that have closed.

  • The House and Senate both rejected this recommendation and retained the funding.
  • Final Budget: The Legislature retained funding for this special payment to encourage rural hospitals to maintain their obstetrical units.

Hospice Room and Board Payments

The governor recommended no change in funding for hospice room and board payments, which were discontinued in budget year 2014 when federal funds were no longer available to cover a portion of the cost.

  • House: The House included a $100 placeholder to continue consideration.
  • Senate: The Senate restored funding of $3.4 million, all state funds.
  • Final Budget: The Legislature included $2.5 million, all state funds, but specified the funding is “one-time.”

Mental Health and Substance Abuse Services

The governor recommended continued restoration of $20 million, all state funds, as included in the current budget year supplemental to cover community mental health and substance abuse services for persons not eligible for Medicaid or the Healthy Michigan Plan.

Implementation of the Healthy Michigan Plan resulted in dramatic reductions in the state funds needed to serve those not eligible for Medicaid, as the vast majority of individuals were expected to transition from state-funded services to Healthy Michigan Plan services, which are 100% federally funded. The transition has not been smooth, and concerns continue that state funding reductions were too large and too fast. An increase of $20 million was included in the current year supplemental appropriation in recognition of the significant funding shortfalls to provide needed services to those not eligible for Medicaid or the Healthy Michigan Plan.

  • The House and Senate concurred with the governor.
  • Final Budget: The Legislature adopted the governor’s recommendation.

Mental Health and Wellness Commission

The governor included funding to continue implementation of the recommendations of the Mental Health and Wellness Commission ($12.7 million in state funds, of which $1.5 million continues to be one-time funding). The governor’s budget for 2016 eliminated all but $1.5 million of the one-time funding included in the 2015 budget. This one-time funding would be used to fund programs in the current year that were delayed by a budget-cutting Executive Order, and to establish a transition program for children who have had multiple hospitalizations at Hawthorn Center, the state’s mental health facility for children.

  • House: The House concurred with the reduction in one-time funding and also delayed the children’s transition program by six months and reduced funding correspondingly.
  • Senate: The Senate included a placeholder of $100 for one-time funding, proposed a further delay of nine months for the children’s transition program, and recommended about half of the ongoing funding for Commission recommendations be replaced by Michigan Health Endowment funding, which is controlled by the Board of the Michigan Health Endowment Fund.
  • Final Budget: The Legislature concurred with the Executive recommendation, but delayed the children’s transition program until the last quarter of budget year 2016.

Public Health and Child and Adolescent Health Services

For 2016, the governor’s proposed budget restored a $1.5 million increase that was originally provided in the 2015 budget to local public health departments for essential services, but was subsequently eliminated in Executive Order reductions. The governor’s recommendation brought funding for local public health essential services to the level it was ten years ago.

The governor’s proposed budget also eliminated funding for a pilot program that began in 2015 to improve child and adolescent health services by working with existing school-based clinics to develop satellite locations that will provide nursing and behavioral health services ($2 million in one-time funding).

Two of every $3 spent on public health services is federal. Over the last decade, nearly all increases in total public health funding have been from federal grants or other sources, while state investments have not been made despite numerous emergency and ongoing needs.

  • The House and Senate concurred with the governor on funding for local public health departments, and put a $100 placeholder in the budget to continue discussions of the child and adolescent health services pilot program.
  • Final Budget: The Legislature adopted the governor’s recommendation for local public health department funding. It also removed the funding from the Department of Health and Human Services budget for the child and adolescent health services pilot program, but funding is included in the School Aid budget.

Vaccine and Immunization Education and Promotion

The governor included no new funding for immunization education and promotion.

  • House: The House also made no recommendation.
  • Senate: The Senate provided $500,000 in state funds for immunization education and promotion. Expenditure of these funds would be dependent on receiving private donations with a match rate of $1 of state funds for every $4 of private funds received.
  • Final Budget: The Legislature concurred with the Senate, added authority to spend the private funds, and designated that the project focus on vaccinations for infants and toddlers.

Services for the Aging

The governor’s budget continued funding of $84 million for senior in-home and nutrition services. The state continues working to become a “no wait” state for senior services.

The governor also recommended expansion of PACE (Programs for All-Inclusive Care for the Elderly) to Jackson County and Traverse City, funded through corresponding savings in nursing home costs.

  • The House and Senate concurred with the expansion of PACE.
  • Final Budget: The Legislature concurred with the PACE expansion but transferred the funding from Medicaid to the Aging and Adult Services Unit within the Department of Health and Human Services.

 

Happy 50th anniversary Medicaid

Today marks the 50th anniversary of the bill signing that created the Medicaid and Medicare programs. Michigan’s John Dingell was present at the signing in 1965, and in recent years continued to push for Medicaid expansion in Michigan that is helping so many more individuals today. (more…)

The House and the Senate Appropriations Committee Retain Special Rural Hospital Obstetrical Payment

Both the House and the Senate Appropriations Committee have rejected the governor’s proposal to eliminate the special hospital obstetrical payment and voted to retain it at its current level in their recommendations for the 2016 budget for the Department of Community Health (now the Department of Health and Human Services).

This special hospital OB payment, a legislative initiative, was included for the first time in the current budget year. An increased obstetrical payment to physicians also was implemented in the current budget year.

For the budget year that begins on Oct. 1, 2015, the governor recommended the elimination of the special hospital OB payment, saving $11 million in total funds, but saving only $3.8 million in state funds. The increased obstetrical payment to physicians was continued in the Executive Budget recommendation.

The Problem

Over the last few years, a number of Michigan hospitals have closed OB units due to low Medicaid reimbursement. When hospital OB units close, it impacts the entire community, not just those enrolled in Medicaid. There currently are 18 contiguous counties in northern and mid-Michigan with no hospital OB units. To stop the erosion of obstetrical services in Michigan hospitals, the Legislature created a special payment for qualifying rural hospitals in the current budget year.

Testimony has been provided year after year on the importance of access to delivery and emergency OB services for pregnant women and their babies within a reasonable geographic area. While the special hospital obstetrical payment will not remove any of the red X’s on the map, it is intended to prevent more counties from closing their OB units.

With around 50% of Michigan births paid by the Medicaid program, it is important to recognize the impact of reduced hospital OB availability on low-income women and their families. Many may face significant transportation issues. Requiring longer travel to reach needed care and delivery services puts women and their babies in jeopardy.

Retaining the special rural hospital obstetrical payment is critically important to low-income pregnant women and their babies, as well as to the communities where they live.

 

Back to school: Are children ready to learn?

For children to succeed in school, they must go to school “ready to learn” —  rested, fed and healthy. But how many children will start the school year with a toothache or other dental problem?

According to the Department of Community Health’s 2011 -2012 Count Your Smiles survey, the number is likely pretty high. (more…)

100,000 kids get reason to smile, 400,000 left out

With the expansion of Healthy Kids Dental to Kalamazoo and Macomb counties, 100,000 kids (and their parents) will have reason to smile as they gain access to this highly successful program starting Oct. 1.

Healthy Kids Dental  is a public-private partnership between the Department of Community Health and Delta Dental of Michigan. The program is available to Medicaid-eligible children under age 21 in 78 counties in which the Department is funded to contract with Delta Dental. (more…)

Community Health Budget Invests in Healthy Workforce

 

For a state to prosper, it must have healthy residents. For individuals to prosper, they must be healthy and have access to the healthcare services they need. The Department of Community Health budget for the year that begins Oct. 1 provides substantial investments to achieve a healthy population and healthy workforce.

The budget includes full-year funding for the Healthy Michigan Plan (Michigan’s Medicaid expansion program), continues expansion of Healthy Kids Dental to Kalamazoo and Macomb counties, continues half of the primary care provider rate increase implemented in 2013, includes funds to begin implementation of the Mental Health and Wellness Commission recommendations, restores funding for senior meals and services, increases Medicaid obstetric payments for both the doctors and some hospitals and expands Medicaid coverage of breast pumps. The budget also funds a number of initiatives or pilot programs to improve the health and health outcomes of Michigan residents.

Potential funding shortfalls for Medicaid health plan services, as well as public mental health services, were identified during the budget process. A reserve fund for managed care plan services was included in the final budget to cover new costs health plans will be responsible for under the Affordable Care Act. No additional funding was included in the final budget for non-Medicaid mental health services as the Senate-recommended additional funding of $4.8 million was ultimately rejected.

The controversy about adequacy of funding to maintain the same level of services for non-Medicaid eligible recipients continues. A Senate Fiscal Agency memorandum, released on June 19 concludes: “There are legitimate reasons to be concerned whether FY 2014-15 funding for CMH non-Medicaid services is sufficient to maintain services at the same level as in prior years.” This issue must be resolved to ensure services and programs are not reduced or eliminated for those fragile and vulnerable populations who depend on them.

The Health Insurance Claims tax shortfall of $110 million was resolved in the final budget through the restoration of the previous use tax on Medicaid managed care organizations rather than by adding state General Funds. The claims tax shortfall has created a funding problem in each of the last three fiscal years.

Of concern is the practice of taking ongoing program funding and reclassifying it as “one-time” funding as has been done with graduate medical education and several other programs over the last few years, making program planning and administration very difficult. Long-term success, requires long-term investments.

The Community Health budget is the state’s largest, growing by over 72% between Fiscal Years 2006 and 2015. Of note, the state General Fund investment has only increased 9% over the Fiscal Year 2006 appropriation. This year, federal funds make up nearly 70% of the budget. The bulk of the total funding, nearly three-fourths, is for the state’s Medicaid and Healthy Michigan Plan programs.

Medicaid

Approximately one in every five Michigan residents is enrolled in Medicaid for their healthcare coverage, and more than half of all births in the state are paid for by the program. In each of the last three years, half of the children in the state have been covered by Medicaid as child poverty in Michigan continues to increase.

In the current fiscal year, the governor projects that 1.82 million Michigan residents will be covered by Medicaid, and recently set a target of enrolling 322,000 individuals in the Healthy Michigan Plan that opened for enrollment on April 1. Program enrollment is off to a great start with more than 315,000 individuals enrolled as of June 30, 2014.

Governor’s Budget:

  • Provides full-year funding of $2.2 billion, all federal funds, for the Healthy Michigan Plan, along with 36 new positions to administer the program. The Healthy Michigan Plan, championed by Gov. Snyder, provides comprehensive healthcare coverage to individuals with incomes up to 133% of the federal poverty level ($15,521 for an individual, $31,721 for a family of four).
  • Recognizes state General Fund savings of over $243 million as a result of Michigan’s implementation of the Healthy Michigan Plan. The savings are realized because the state previously spent 100% state funds for limited services to very low-income uninsured individuals, and with the expansion, federal funds will be available to pay for services for this population. The governor recommends that half of the savings, or $122 million, be placed in a newly created Health Savings Fund that would ensure that the state has sufficient funds to cover future reductions in federal matching funds. Healthy Michigan Plan funding is 100% federal for calendar years 2014, 2015, and 2016. The federal funding declines during calendar years 2017- 2019, reaching 90% in 2020, where it remains.
  • Includes $25.2 million for autism services, down from $35.2 million in the current year. The funding reduction is not a program reduction, but reflects a slow start-up for the program due to the need to develop provider capacity. To increase needed capacity, $3 million in continuing “one-time” funding– increased from $2 million in the current fiscal year–is recommended to train autism services providers through the creation of university autism centers. In Fiscal Year 2014, grants of $500,000 each are allocated to Eastern Michigan, Western Michigan, Central Michigan and Oakland universities. The Fiscal Year 2015 recommendation allocates $1 million each to Eastern Michigan, Western Michigan and Michigan State universities.
  • Recommends $26 million in state funds, bringing in $49.4 million in federal funds, to continue approximately half of the rate increase for primary care providers. This rate increase, which brings Medicaid rates up to Medicare levels, is required by federal law in calendar years 2013 and 2014, and is 100% federally funded. In calendar year 2015, the rate increase is no longer required or 100% federally funded, so a state investment is required to continue.
  • Eliminates $35.6 million in special payments for rural and sole community hospitals, saving $12 million in state General Fund. These funds were classified as “one-time” funding in Fiscal Year 2012, but converted to ongoing funding for Fiscal Years 2013 and 2014.

House:

  • Concurs with the governor’s recommendation for full-year funding for the Healthy Michigan Fund, as well as the additional staff to administer the program, but creates a separate staffing line-item.
  • Concurs with the governor on state General Fund savings of over $243 million as a result of implementation of the Healthy Michigan Plan.
  • Concurs with the $10 million budget reduction in autism services, but does not concur with the recommended increase in university training funds. The House reduces the training funding from $2 million to $1.5 million in “one-time” grants, and specifies $500,000 in continuing grants to Eastern and Western Michigan universities and adds $500,000 for Michigan State University.
  • Concurs with continuing a portion of the primary care provider rate increase, but recommends a lower level of funding — $21.4 million in state funds and $40.7 million in federal funds.
  • Rejects the Executive recommendation to eliminate special payments to rural and sole community hospitals, and recommends continuation funding with a new mix of funds, including provider taxes and federal funds—maintaining the state General Fund savings proposed by the governor.

Senate:

  • Concurs with the governor and the House on full-year funding and additional staffing, in a new line-item, for the Healthy Michigan Plan.
  • Concurs with the governor and the House on state General Fund savings of over $243 million from implementation of the Healthy Michigan Plan.
  • Concurs with the $10 million budget reduction in autism services, and recommends that $4 million from the Autism Coverage Fund be used to replace $4 million in General Fund. This would require a law change. The Senate also recommends increases rather than reductions in university training funds. The Senate restores funding of $500,000 each to Central Michigan and Oakland universities, concurs with the governor on the $1 million grants each to Eastern Michigan, Western Michigan and Michigan State universities, and adds $1.5 million for “autism navigators” to assist families in choosing treatment and services.
  • Concurs with the governor on the primary care provider rate increase.
  • Rejects the Executive recommendation to eliminate special payments for rural and sole community hospitals, and recommends continuation with the current financing of state and federal funds.

Final Budget:

  • Includes full-year funding, all federal funds, for the Healthy Michigan Plan as well as 36 new positions to administer the program.
  • Includes state General Fund savings of $232 million in recognition of previously state-funded services provided to newly eligible Healthy Michigan Plan enrollees that will be covered by the federal government. The governor recommended that half of the savings be deposited in a healthcare savings account to be used in future years when the state must contribute a small percentage of the cost of the Healthy Michigan Plan. Due to the reduced May 2014 revenue projections, that deposit will not be made.
  • Includes $25.2 million for autism services, a reduction of $10 million in recognition of the slow start-up of the program and the need to develop provider capacity. This is not a program reduction. In addition, $5.5 million in new funding from the Autism Coverage Fund is added to $3 million in state General Funds ($1 million new funds) to provide grants for university autism centers to provide research, education and training, as well as a new support program for families. University grants include: $4 million to Western Michigan University Autism Center for Excellence, $1 million each to Michigan State and Eastern Michigan Universities, $500,000 each to Central Michigan and Oakland Universities. The $1.5 million family support program will assist families in choosing service and treatment options. The new funding is designated as one-time funding.
  • Includes funding to continue about half of the primary care rate increase implemented in calendar year 2013. A state investment of $25 million is included to continue a portion of this key provider rate increase.
  • Continues $35.6 million for special payments for rural and sole community hospitals.
  • Provides an increase in obstetrical service payments to physicians ($4.8 million in state funds, $9 million in federal funds) and to qualifying rural hospitals ($3.8 million in state funds, $7.2 million in federal funds). Over the last several years, many hospitals have closed their obstetrical units due to low Medicaid reimbursement, leaving many communities without obstetrical services.
  • Includes funding of $1.7 million in state funds, $3.3 million in federal funds to recognize the impact of the recently passed minimum wage increase on the Adult Home Help program.
  • Provides a 6% rate increase for adult foster care personal care services.
  • Transfers $4.3 million in Graduate Medical Education funding from one-time back to ongoing funding.
  • Does not include Senate-recommended restoration of funding for the Harper/Hutzel Hospital’s special payment. The hospital operates an infant mortality program with the National Institutes of Health, and has indicated it would maintain the current focus on improving the health status of women and children.

Healthy Kids Dental

Michigan currently provides enhanced dental services to more than 500,000 children in 78 counties. Access to dental services is essential to prevent tooth decay, the NO. 1 chronic disease in children. Healthy Kids Dental improves access to care by partnering with Delta Dental of Michigan to increase provider reimbursement rates and simplify administration. With Michigan’s dismal ranking in the Race for Results for African American children, expanding Healthy Kids Dental to the remaining counties presents a tremendous public policy opportunity.

Governor’s Budget:

  • Includes $5.4 million in state General Fund and $10.3 million in federal funds to expand the Healthy Kids Dental program to an additional 100,000 children in Kalamazoo and Macomb counties. With that expansion, the program would cover over 611,000 children in 80 of 83 Michigan counties. Not yet covered are more than 400,000 children in three of the most populated Michigan counties that are the home to many low-income children and children of color, including Wayne, Oakland and Kent counties.

House:

  • Concurs with the governor and makes no recommendation to expand Healthy Kids Dental to the remaining counties.

Senate:

  • Concurs with the governor and the House on Healthy Kids Dental funding and makes no recommendation to expand the program to the remaining counties.

Final Budget:

  • Includes $15.7 million recommended by the governor to expand Healthy Kids Dental to Kalamazoo and Macomb counties, covering an additional 100,000 children. However, more than 400,000 low-income children in Wayne, Kent and Oakland counties are left behind, nearly 40% of the eligible children.

Mental Health and Substance Abuse Services

Since Fiscal Year 2005, Medicaid-related mental health spending has increased by over 50%, while non-Medicaid spending has decreased, leaving thousands of residents without needed services. Funding for substance use disorder services increased by 12%, largely because of increases in federal funding, but fewer individuals were served in Fiscal Year 2013 than in the previous 9 years, despite the growing problem with heroin and other opiate addictions.

Governor’s Budget:

  • Supports the Healthy Michigan Plan, and with the expansion of Medicaid eligibility, enrolled individuals will also have access to comprehensive mental health and substance use disorder services. Again, great concern has been raised about the adequacy of the funding to provide the promised services.
  • Recommends $15.6 million in state General Fund, $5 million of which is “one-time” funding, to begin implementation of the recommendations of the Mental Health and Wellness Commission, which released its recommendations for improvements in mental health services in January 2014.
  • Recommends $3.4 million in state General Fund for the Mental Health Diversion Council to treat those with mental illness or developmental disabilities in settings other than the criminal justice system. Additional funding of $2.7 million is included in the Judiciary and Corrections budgets.

House:

  • Concurs with the Executive recommendation to expand mental health and substance use disorder services through the Healthy Michigan Plan.
  • Concurs with the governor on $15.6 million in state funding to implement Mental Health and Wellness Commission recommendations, and also adds potential federal funding (yet to be identified), to increase programming capacity by $22 million.
  • Concurs with the governor and adds $3.4 million in state General Fund for the Mental Health Diversion Council.

Senate:

  • Concurs with the governor and the House on expansion of services through the Healthy Michigan Plan, and also adds $4.8 million General Fund for community mental health non-Medicaid services.
  • Adds $100 placeholders for additional legislative discussions on expanded funding to implement the recommendations of the Mental Health and Wellness Commission.
  • Includes a $100 placeholder for additional funding for the Mental Health Diversion Council.

Final Budget:

  • Includes federal funding to cover mental health and substance use disorder services for the newly eligible Healthy Michigan Plan enrollees. Savings associated with the implementation of Healthy Michigan Plan were reduced $16 million in recognition of lower projected mental health savings. However, as mentioned above, there has been considerable controversy about the adequacy of remaining state funding to maintain the same level of services for non-Medicaid eligible individuals, and services not funded by the Medicaid program. State funds for non-Medicaid/Healthy Michigan Plan services were reduced by two-thirds.
  • Includes $14.3 million in state funds and $22.2 million in federal funds to begin implementing the recommendations of the Mental Health and Wellness Commission. Of the appropriated amounts, $5 million of the state funds and $4 million of the federal funds are classified as one-time funds.
  • Includes $3.4 million to implement recommendations of the Mental Health Diversion Council to treat those with mental illness or developmental disabilities in settings other than the criminal justice system.

 Public Health and Children’s Services

Nearly two of every three dollars spent on public health services is federal. Over the last decade, nearly all increases in total public health funding have been from federal grants or other sources, while state funding has remained essentially flat.

Governor’s Budget:

  • Recommends continuation funding of $39.4 million for local public health services. Appropriations for local public health essential services, while increased by $2 million in Fiscal Year 2014, remain below the Fiscal Year 2005 appropriation.
  • Includes $2.5 million in state funds to conduct a regional needs assessment and expand home visiting services to at-risk families with young children in rural areas in the Upper Peninsula and Northern Lower Peninsula.
  • Includes $2 million in “one-time” state funding for a pilot program to improve child and adolescent health services by working with two existing school-based clinics to identify satellite locations that will be serviced by mobile teams, increasing access to nursing and behavioral health services in schools.
  • Increases the essential health provider program by $600,000 to reflect projected additional private revenue. This program assists primary care providers who practice in medically underserved areas with the repayment of their educational loans.

House:

  • Provides a $1.5 million state General Fund increase for local public health services, bringing total funding to the level of the Fiscal Year 2005 appropriation.
  • Concurs with the governor by adding $2.5 million for home visiting services in rural areas, but funds the expansion with federal (TANF) funds, rather than state funds.
  • Concurs with the governor on adding $2 million for a child and adolescent health services pilot program, but funds with federal (TANF) funds, rather than state funds.
  • Concurs with the governor by increasing the essential health provider program by $600,000.

Senate:

  • Includes a $100 placeholder for discussion of the House-recommended expansion of funding for local public health services.
  • Concurs with the House by adding $2.5 million in federal TANF funds for home visiting services in rural areas, and also adds a $100 placeholder for a potential funding increase for evidence-based home visiting.
  • Concurs with the House by adding $2 million in federal TANF funds for a child and adolescent health services pilot program.
  • Concurs with the governor and House, adding $600,000 in private funds for the essential health provider program, and also adds $500,000 in state General Fund.

Final Budget:

  • Includes $1.5 million in state funds to bring total funding for local public health operations back to the level of the FY2005 appropriation.
  • Includes $2.25 million in state funds to expand home visiting programs in northern Michigan and the Upper Peninsula to pregnant women and families with children up to age 5. A regional needs assessment will identify sites and potential participants.
  • Includes $1.5 million to test a new financing tool for certain services in limited target areas. Known as Social Impact Bonds, but referred to as Pay for Success Contracts in the Community Health budget, the goal is to deliver needed services in an innovative manner that improves outcomes and reduces government costs. Non-governmental organizations provide up-front funding and assume the risk for programs that are developed and delivered by non-profit organizations.. Government payments are then made only when performance measures are achieved and savings are documented. The Fiscal Year 2015 pilot projects will focus on home visiting programs for mothers and infants, and community supports in high risk neighborhoods.
  • Includes $100,000 state General Fund to increase the Pregnancy and Parenting Support Program to $800,000.
  • Includes $150,000 state General Fund to increase diabetes prevention funding to $800,000.
  • Includes $150,000 state General Fund to establish a pilot program to provide more comprehensive services and supports to individuals with Alzheimer’s disease to enable them to remain in their homes as long as possible, delaying potential moves to long term care facilities.
  • Includes $100,000 state General Fund to increase the Pregnancy and Parenting Support Program to $800,000.
  • Includes $150,000 state General Fund to increase diabetes prevention funding to $800,000.
  • Includes $150,000 state General Fund to establish a pilot program to provide more comprehensive services and supports to individuals with Alzheimer’s disease to enable them to remain in their homes as long as possible, delaying potential moves to long term care facilities.
  • Includes $2 million, classified as one-time funds, for a pilot project to increase child and adolescent access to nursing and behavioral health services using two existing school clinics as hubs with mobile health teams serving satellite locations.
  • Includes $1.1 million in new funding for the essential health provider program. About half of the funding is state General Fund, the remainder is private funds.
  • Includes $200,000 in state funds to support efforts to combat human trafficking in Michigan.
  • Includes $500,000 in additional funding to create more healthy homes through lead abatement.
  • Includes $500,000 for breast cancer screening and services. These funds represent a partial restoration of the prior Health and Wellness funded services. All funds for “cancer prevention and control” services from the Health and Wellness fund were eliminated in the current fiscal year.

Services for the Aging

Governor’s Budget:

  • Includes $5 million in state funds to help eliminate the waiting list of an estimated 4,500 seniors eligible for home-delivered meals ($1.8 million) and in-home services ($3.2 million) provided through Area Agencies on Aging around the state. With this increase in home-delivered meals, the reductions in funding over the last decade have been completely restored.
  • Expands funding by $9 million in state funds, $17.2 million in federal funds, to eliminate the waiting list for the MIChoice program that provides in-home and community services to help seniors or those with disabilities remain in their homes rather than moving to nursing homes, serving an additional 1,250 individuals.
  • Recommends the expansion of PACE (Programs for All-Inclusive Care for the Elderly) to more counties, expanding sites to Flint, Lansing, and Saginaw, with funding from corresponding savings in nursing home costs.

House:

  • Concurs with the governor, adding $5 million for home-delivered meals and in-home services for seniors.
  • Concurs with the governor by expanding the MIChoice program by $9 million in state funds and $17.2 million in federal funds.
  • Concurs with the governor on the expansion of the PACE program.

Senate:

  • Concurs with the governor and House, adding $5 million for home-delivered meals and in-home services for seniors.
  • Concurs with the governor and House by expanding the MIChoice program by $9 million in state funds and $17.2 million in federal funds.
  • Concurs with the governor and House on the expansion of the PACE program.

Final Budget:

  • Includes $5 million for home-delivered meals and in-home services for seniors.
  • Expands the MIChoice program to eliminate waiting lists and allow seniors and those with disabilities to remain in their own homes or the community rather than moving to nursing homes by adding $9 million in state funds and $17.2 million in federal funds.
  • Expands PACE (Program for All-Inclusive Care for the Elderly) to Flint, Lansing, and Saginaw, and Muskegon funded by projected savings from reduced nursing home utilization.

Healthy Michigan plan enrollment tops 275,000

Enrollment in the Healthy Michigan Plan as of June 2 totals 276,622. This is truly remarkable considering the program was implemented just over two months ago on April 1. Genesee County, at 98.5%, has enrolled the highest percentage of those potentially eligible. What a great achievement.

The Healthy Michigan Plan is Michigan’s unique Medicaid expansion plan. It provides comprehensive healthcare coverage to Michigan’s low-income uninsured residents. To be eligible for the program, an individual must be between the ages of 19 and 64, not currently eligible for Medicaid or Medicare, a citizen or lawfully admitted to the U.S., and have income less than 133% of the federal poverty level (up to $15,521 for an individual or $31,721 for a family of four).

Application for the program can be made by phone (1-855-789-5610), online at www.michigan.gov/mibridges, or in person at a local Department of Human Services office. Applications made through the on-line system can have eligibility determined in a matter of minutes and sometimes even seconds. (more…)

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