Delay in Medicaid expansion to cost Michigan $7M a day in lost federal funds

By Kathleen Gray

Detroit Free Press Lansing Bureau

LANSING — After months of often-heated debate, the state House took final action Tuesday on a plan to expand Medicaid health care coverage to 470,000 low-income Michiganders, voting 75-32 to concur with changes made to the bill by the state Senate.

Final approval didn’t come without hiccups. The Senate failed to give the bill immediate effect, which means that it won’t go into effect until sometime in late March or early April. That delay will end up costing the state an estimated $7 million a day in lost federal funds for the expansion, or more than $630 million if delayed to April.

“We’re not going to reconsider; we’re done. We’re moving on to different issues,” said Senate Majority Leader Randy Richardville, R-Monroe. “It’s like we had this really big dinner. We got the dinner done and people are going to ask for dessert. We’re going to skip dessert on this one.”

The Senate fell two votes short last week of giving the bill immediate effect. The state Senate could have reconsidered and revoted.

“But the votes were already cast. There wasn’t anybody willing to change their minds,” Richardville said. “The Legislature in total has gone through enough with this issue.”

The bill now goes to the Gov. Rick Snyder, who said earlier Tuesday that he’ll sign the bill when he gets back from a 10-day trade mission to China.

“I would have preferred that it would have gotten immediate effect,” Snyder said. “But this is still a victory for Michiganders.”

House Speaker Jase Bolger, R-Marshall said, “We have provided additional coverage for hundreds of thousands of additional Michiganders today. We’re looking out for their health care. Today is a good day.”

House Minority Leader Tim Greimel, D-Auburn Hills, lauded the passage but lamented the fact that it won’t go into effect until the spring of next year.

“I am grateful that quality medical care will be available to hardworking people who currently have none, but it is a disgrace that they will wait longer to receive it than they need to,” he said.

Senate Minority Leader Gretchen Whitmer, D-East Lansing, blasted Republicans for their failure to act.

“I have a real hard time explaining to my constituents the holdup of this bill. But it’s pure politics,” she said. “It’s because it’s associated with ‘Obamacare’ and because the tea party in Michigan is the tail that’s wagging the dog in this chamber.”

Republicans disputed whether the state would really lose $7 million a day in federal funding, saying that not all 320,000 new Medicaid recipients in the first year would be signed up in the first months of eligibility.

“That’s extremely unlikely that sign-up will be that quick,” said Sen. Bruce Caswell, R-Hillsdale. “So, $7 million is factually inaccurate.”

Department of Community Health Director Jim Haveman said he thinks the $7-million estimate is a fair one and may even be low the closer the bill gets to implementation. Also unclear is whether uninsured residents, who are eligible for Medicaid but unable to get it until April, will be subject to penalties — $95 a year for individuals and $285 for families — mandated by the federal government.

“We know that the Affordable Care Act says that penalties start on Jan. 1,” Haveman said. “I don’t know what the federal government plans to start on Jan. 1. I’m sure we’ll learn that more as the next few months roll up.”

More important, said Don Hazaert, executive director of Michigan Consumers for Health Care, which is one of the agencies that will be helping people sign up for health care coverage, is that even though expansion has been approved, “We’re talking about denying health care to individuals who otherwise are eligible under the law.”

The vote in the House came after state Rep. Ed McBroom, R-Vulcan, who said he’s been on Medicaid, tried one last time to get his colleagues to oppose the expansion.

“This is a massive expansion of federal government,” he said. “This is not a good move for Michigan residents.”

But the vote on Tuesday varied little from the outcome in June. Only state Rep. Greg MacMaster, R-Kewadin, changed his vote, going from support in June to a no on Tuesday.

The Medicaid expansion would extend to people who fall within 133% of the federal poverty level and would be fully paid for by the federal government through 2017. The federal contribution would drop to 90% by 2020.

Recipients will have to contribute 5% toward their health care, which will go up to 7% after four years on the Medicaid rolls.

Currently, most of the state’s 1.9 million Medicaid recipients are children, disabled adults and the extremely poor. The expansion would open up the program to many low-income working Michiganders who have no health insurance, but who will be required to get coverage under the Affordable Care Act.

Last week’s 20-18 vote to expand Medicaid and Tuesday’s concurrence in the House — even without immediate effect — will make Michigan the 25th state (including the District of Columbia) in the nation to go ahead with the Medicaid expansion, according to the Kaiser Family Foundation. Four more states are debating the issue, and 22 have decided not to go ahead with the expansion.

Contact Kathleen Gray: 517-372-8661 or kgray99@freepress.com or @michpoligal on Twitter.

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