Proposed Medicaid eligibility restrictions have costly unintended consequences

Aviva Aron-Dine

Aviva Aron-Dine

This is a guest blog by Aviva Aron-Dine, Vice President for Health Policy, the Center on Budget and Policy Priorities

Proposals to take Medicaid coverage away from people who don’t work or engage in work activities for a set number of hours each month will lead to large coverage losses, worse access to care, and less financial security, previous CBPP analyses showed. And they’re unlikely to advance their goal of increasing employment; in fact, they’ll likely make it harder for some people to work. Two new CBPP analyses (see here and here) show that, on top of these problems, these state proposals for waivers from federal Medicaid rules (some of which the Trump Administration has already approved) will have other, likely unintended, harmful consequences.

Many of those losing coverage will either be eligible people who lose Medicaid due to red tape or workers with unstable jobs who experience gaps in employment or can’t find enough hours of work every month.

  • Some eligible people will lose coverage due to complexity and state errors. The new Medicaid eligibility restrictions are extraordinarily complex for both states and enrollees, a new CBPP analysis explains. States will face an array of challenges to administer the new requirements correctly, such as tracking each enrollee’s compliance each month. And all enrollees, including those who are meeting the requirements, will have to jump through new hoops to stay covered. People who are working or engaged in work activities for a sufficient number of hours each month will have to understand which activities count toward the requirement, how many hours they must complete, and how to document their hours in these activities in accordance with state specifications. Enrollees who should qualify for exemptions will need to understand the exemption criteria, obtain and submit the needed documentation, and renew their exemptions periodically.

Experience with eligibility restrictions in Medicaid and work requirements in other federal programs shows that many eligible people will lose coverage. Certain vulnerable groups are particularly ill-equipped to cope with added red tape, which is why studies have found that people with physical disabilities, mental health needs, and substance use disorders are disproportionately likely to lose benefits, even though many should qualify for exemptions.

State errors will also cause some eligible people to lose coverage. Notably, two states with newly approved waivers, Kentucky and Arkansas, have struggled to implement other recent policy and system changes, causing tens of thousands of enrollees to lose coverage.

  • Working people will lose coverage because they can’t meet the work requirement every month. Most Medicaid enrollees work, but in unstable jobs in which hours fluctuate from month to month and in which an illness, family emergency, or disruption in child care or transportation can lead to job loss. As a result, nearly half (46 percent) of working low-income people who could be subject to Medicaid work requirements would face the risk of losing coverage under an 80-hour per-month standard, an earlier CBPP analysis found. Even among people working at least 1,000 hours per year (people meeting an 80-hour-per-month requirement on average), 1 in 4 would fall short at least one month during the year.

About 60 percent of Medicaid enrollees who could be subject to work requirements under Trump Administration guidance work at some point during the year, 15 percent report they couldn’t work due to illness or disability, and another 18 percent are caregivers or in school, the Kaiser Family Foundation estimates. With large shares of workers and people with serious health needs at risk of losing coverage, the majority of enrollees at risk likely fall into one of these groups.

These proposals will also have large costs for states, the federal government, and health care providers.

  • Implementing complex new eligibility restrictions will cost tens or hundreds of millions of dollars per state. States and the federal government will pay millions of dollars to information technology (IT) vendors and other contractors to change notices and forms to capture more information and reprogram eligibility systems to add and track new requirements. And states will have to hire staff to administer the new rules and monitor compliance.

As estimates from nine states implementing or considering such proposals show, projected costs are typically in the tens of millions of dollars per year, with even higher start-up costs for some states. Kentucky plans to spend $186 million in fiscal year 2018 and another $187 million in 2019 to implement its waiver. And a work requirement considered by Pennsylvania’s legislature would have cost $600 million and require 300 additional staff to administer, according to a state official. Effectively, these proposals divert some state and federal dollars from providing health care to creating new bureaucracy.

  • Coverage losses from eligibility restrictions will increase uncompensated care costs. As our other new analysis explains, work requirements and other barriers to coverage in Medicaid threaten to reverse the large drop in uncompensated care costs achieved as the Affordable Care Act (ACA) Medicaid expansion and other major coverage provisions took effect. Those costs fell by 30 percent nationwide as a share of hospital operating budgets between 2013 and 2015, with the largest drops in states experiencing the largest coverage gains: costs fell by an average of 47 percent in Medicaid expansion states. Reduced uncompensated care costs have benefited low-income families, who’ve seen large reductions in medical debt and, as a result, better access to credit. They’ve also benefited hospitals — especially rural hospitals — and other providers, as well as state budgets. Because new eligibility restrictions are projected to reverse a meaningful share of the coverage gains under the ACA’s Medicaid expansion, they will likely reverse a significant share of uncompensated care savings as well.

— Aviva Aron-Dine

League testifies against bill to strip Medicaid from struggling Michiganders, shares real story

For Immediate Release
May 2, 2018

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

House Appropriations Committee takes up SB 897 but delays vote

LANSING—The Michigan League for Public Policy issued the following statement on the Michigan House Appropriations Committee’s hearing today on Senate Bill 897 that would take vital coverage away from Medicaid beneficiaries who don’t meet rigid work requirements. The committee could vote on the legislation as early as next week. The statement can be attributed to Michigan League for Public Policy President and CEO Gilda Z. Jacobs, who also provided testimony at today’s hearing.

“As I sat before nearly 30 lawmakers today, I offered something that should resonate with every single one of them on why taking away Medicaid from people who are unable to work is a bad idea. The League and our partners have appealed to legislators’ brains, their pocketbooks—or the state’s—and their hearts, sharing myriad data and evidence that shows Medicaid is a work support, analyses that it will come with significant costs, and real stories from real people on how it will hurt struggling residents. The House Fiscal Agency analysis shows the bill would cause 105,000 struggling Michiganders to lose coverage—and that’s not something to celebrate. This bill will increase uncompensated care costs and the program will cost the state $20-$30 million annually. And it will hurt a majority of Michiganders that it claims it will help. The House seems to be following the Senate’s lead in rushing through this bill before truly understanding its consequences, but without a vote today, we still have time to change their minds.”

As part of her testimony today, Jacobs shared a personal story from Karen Schultz Tarnopol, an Oakland County resident who attested firsthand to the value of Medicaid and the threat of this bill. An excerpt of Karen’s story is included below.

“I was a single parent of two kids with a very good job…In 2008, when the market crashed…I lost my job with no notice, severance, insurance, etc. I spent many years trying to reestablish myself and had many jobs along the way. Because my work wasn’t consistent and/or for the same employer all the time, it would have been an arduous task to report a running 29-hour a week schedule to DHS [now the Department of Health and Human Services].

“While my kids and I were on Medicaid, something I signed up for reluctantly due to stupid pride, my son had open heart surgery and I had breast cancer. Medicaid paid every dime for both of us. As a mother, I was able to concentrate on caring for my sick son, and when I was undergoing treatment, I was not financially burdened with the medical bills and was able to focus on getting well and caring for my kids. Do not underestimate the significance of having good health care. If we didn’t have this insurance our story would have been significantly altered. Being on Medicaid and food stamps is not something I wanted to be on, and we are no longer on either program, but it made all the difference in the world when I needed it.”

The following groups opposed Senate Bill 897 in committee today: Center for Civil Justice; Michigan Protection and Advocacy Services; National Association of Social Workers – Michigan Chapter; American Cancer Society Cancer Action Network; American Lung Association; Washtenaw Health Plan; The Arc Michigan; Michigan Health & Hospital Association; American Heart Association; Ascension Health; Michigan Council for Maternal & Child Health; Cystic Fibrosis Foundation; United Way for Southeastern Michigan; Elder Law & Disability Rights Section – State Bar of Michigan; ACCESS; American Diabetes Association; McLaren Health Plan; Henry Ford Health System; Michigan Community Action; Michigan Catholic Conference; Trinity Healthy; Planned Parenthood.

Background:

From the Michigan League for Public Policy:

Blog: Is the Legislature even listening? (Includes excerpts of five personal stories.)

Fact Sheet: SB 897: Medicaid work requirements

Report: Medicaid Work Requirements: Why Making People Work Doesn’t Work

From the Center on Budget and Policy Priorities:

Report: Michigan Medicaid Proposal Would Lead to Large Coverage Losses, Harm Low-Income Workers

Blog: Michigan’s Medicaid Proposal Would Harm Low-Income Workers — And Can’t Be Fixed

From the Center for Healthcare Research and Transformation, the Institute for Healthcare Policy and Innovation, and Poverty Solutions at the University of Michigan:

Column: Medicaid work bill could hurt, not help, people who want to work

Column: Beware of unintended consequences of Michigan Medicaid work demand

Fact Sheet: Proposed Work Requirements for Medicaid in Michigan

From ACCESS and the Michigan Disability Rights Coalition:

Column: Protect Healthy Michigan as is

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The Michigan League for Public Policy, www.milhs.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.

Is the Legislature even listening?

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As a legislator I took seriously my duty to serve the people I represented. I made it a priority to stay informed, to read the latest data and reports on each issue, and to ask experts for their opinions. But one of the most important aspects of my work was to listen. My constituents were not just data points. They were people. It was my job to hear their voices, and I’ve carried that priority with me to the League.

Unfortunately, listening to constituents and making informed decisions appears to be a lost art in the Legislature. Two weeks ago, the Michigan Senate passed Senate Bill 897, a proposal to take away Medicaid and the Healthy Michigan Plan from folks who don’t work a stringent number of hours. On May 2, I testified in opposition to this bill in the House Appropriations Committee, but they may take it up for a vote any day now. Please help stop it.

 

(Wes Stafford, Wednesday, May 28, 2008) The waiting room fills long before patients are seen Wednesdays at the Helen M. Nickless Health Clinic, 1458 W. Center Road, Hampton Township.

(Wes Stafford, Wednesday, May 28, 2008) The waiting room fills long before patients are seen Wednesdays at the Helen M. Nickless Health Clinic, 1458 W. Center Road, Hampton Township.

 

In pushing this legislation, Republican lawmakers are ignoring state and federal data and analysis, the large group of advocates opposing this bill, and the hundreds of concerned residents that have reached out to their offices. And they are disregarding the real Michiganders who would be impacted—real Michiganders who have been sharing their stories and fears with us.

Ralph H. is self-employed and works from home because he needs to care for his wife, who is disabled. For 10 years, Ralph went without health insurance, as many self-employed people do. When he was approved for the Healthy Michigan Plan, Ralph was finally able to get surgery for a blood clot. Since being on the plan, he still lacks stable income, but at least he hasn’t been worried about his basic healthcare needs. “Some months, we’re lucky if we have $100 left over, once we pay all our bills, so we’re hardly running away with the state’s money.”

He’s nervous because due to the lack of information and clarity on the bill, he’s not sure he can continue to receive healthcare. “Without the coverage, I would essentially be thrown back into the situation that I confronted before I finally got it. That’s one more worry that I certainly do without.”

Kristen H. (no relation) shared a cautionary story with us. She lost her job—and insurance coverage—when her daughter was diagnosed with a genetic syndrome and required more care than Kristen could manage while working. It’s every parent’s nightmare. Kristen, a single mom, found herself suddenly unemployed, with no insurance, and caring for three kids, including a child facing major health issues. “The next several years were very difficult financially as I wasn’t able to work, but we managed to get by. I ended up having a minor surgery during that time that could have seriously impacted my health. Without Medicaid, I may have put off getting care, resulting in serious harm. I may not have been here to provide care not only for my disabled daughter, but my other two children as well. It not only could have impacted my health, but I could have ended up in a financial hole I couldn’t get out of as well.”

Because of Medicaid, Kristen was able to care for her daughter and eventually she was able to work again. But she’s terrified for other parents who might find themselves in her situation: “I would have been one of the individuals who may not be here today if these requirements were in place when my family so desperately needed the safety net that Medicaid provided.”

Therese O. is a 54-year-old widow who receives Medicaid. She couldn’t afford insurance payments after her husband died, and she now works from home. Her work, though, doesn’t offer healthcare and she doesn’t earn enough to purchase it on her own. “This proposal to make Medicaid recipients work 29 hours per week will cause me to lose my Medicaid. If I could work that much, I wouldn’t need Medicaid. I am housebound and I have no family to help me.”

Mitch and Julie B. are married and both self-employed. While Mitch is a veteran and has health insurance through Veterans Affairs, he wrote that “the only way we can afford healthcare for my wife is with Medicaid.” They are worried about how self-employed people will prove their work hours. But they have another concern—homeschooling their daughter. As Julie shared, “Between the two of us we work 60+ hours a week so that one of us can be with our child. Why should one of us have to get a low-paying job so that we can put her in school, pay for childcare and afterschool care?”

These are just some of the stories we’ve heard. Other potential concerns include people who work seasonal jobs or people in the service industry with unpredictable work hours, and those with mental health challenges. People like Ralph, Kristen, Therese, Mitch and Julie, and others need to know they can continue receiving healthcare. They are already living in perilous situations, uncertain from week to week whether they’ll be able to afford the basics. We’re terribly concerned that some in the Legislature seem to be ignoring stories like these and are instead insisting on cutting people off.

Stable healthcare allows people to work. Taking away healthcare just creates yet another barrier to holding down a job to support one’s family. These requirements would be a great burden to patients, hospitals, employers and state offices. The question I’m wondering is, “Other than the perceived health of some candidates’ campaigns, who is this poorly conceived policy really helping?”

— Gilda Z. Jacobs

Medicaid work requirements: A prescription for problems

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“We’ll call you with the results on Monday.”

If you’ve ever left your doctor’s office after hearing those words, then you’re familiar with the dread. Minutes become hours, hours become days, and the worst fears tend to enter your mind no matter how hard you try to suppress them.

Waiting for that call is excruciating. But a law being proposed in Lansing would make it a lot worse for many in our state.

Michigan’s Senate Bill 897 is ethically, logically and morally wrong; it threatens the healthcare of hundreds of thousands of Michiganders. And it’s going to cost us a boatload.

The bill comes on the heels of a change at the federal level that allows states to request waivers to enforce work requirements on Medicaid recipients.

First, let’s look at what Medicaid is. Medicaid is healthcare. It was designed to help sick people get well and to help healthy people stay that way. And it does a pretty great job. Michiganders with low incomes are able to sleep at night knowing that they can receive healthcare through Medicaid and Michigan’s expanded Medicaid program, the Healthy Michigan Plan. Since its creation in 1965, that’s what Medicaid has been: A healthcare plan.

Now, let’s look at what Medicaid is not. Medicaid is not a jobs program. Jobs programs help train workers, eliminate barriers like transportation and childcare issues, and work with local governments, community members and businesses to find solutions to problems in workforce development. By all means, let’s invest in solid jobs programs!

But some in the Michigan Legislature think we need to complicate the health plan by adding layers of bureaucracy and obstacles with work requirements. Here are a few logical truths to counter the myths being used to push work requirements:

 

  1. Most Medicaid recipients who can work are already working. Those who don’t work are students, caregivers, retired or in poor health.Work Requirements (2) 302x550
  2. Michiganders enrolled in Healthy Michigan are doing better at work and are able to find work because they have healthcare. It’s not a big stretch: Being healthy makes it easier to thrive in the workplace. But it doesn’t work the other way around. Being at work doesn’t suddenly cure health problems.
  3. Medicaid recipients, employers, doctors and state employees will be burdened with paperwork, red tape and additional hurdles. These complications will strain the state and cause many struggling Michiganders to lose coverage.
  4. It’s going to cost us. Kentucky, which recently implemented work requirements, reports that just setting up the infrastructure to track work requirements will cost nearly $187 million in the first six months alone.
  5. Work requirements are potentially illegal. Under the act that created the Medicaid program, certain parts of the Medicaid Act can be waived, but new eligibility criteria cannot be imposed—in this case, the criteria of work in order to qualify for Medicaid. Legal challenges have already begun in Kentucky that could have repercussions on any states pursuing work requirements. Michigan lawmakers should wait and see how that case unfolds.

I’m obviously urging you to take action on this issue. But I’m also asking you to start talking about it. Talk to your friends, your neighbors, your family. Help them to understand what Medicaid is and what it is not.

I also hope you’ll listen. Over the years Medicaid has helped millions of Michiganders, from those going through a rough patch to those struggling with chronic health problems or terminal illness. It is likely that someone you love or know has benefited from Medicaid. Take the time to listen to how it helped them temporarily or on a long-term basis. And encourage them to share their story to make a difference.

Healthy people are better able to work, but working people do not automatically become healthy. Let’s stop discussing unnecessary plans like this and instead focus on the real things Michigan residents need to work and provide for their families, including Medicaid and other assistance programs, job training, adult education, high-quality child care, reliable public transportation, and more.

— Gilda Z. Jacobs

Waiter, there’s a rotten policy in my soup

Food metaphors abound in the realm of public policy—the economic pie, the Medicare doughnut hole, and of course, making sausage. So when the Centers for Medicare and Medicaid Services (CMS) recently issued a letter to states concerning Medicaid work requirements, I couldn’t help but think of another, lesser known political food analogy: the policy primeval soup, in which political actors store their desired policy solutions in search of problems while they wait for the political stars to align in their favor.

The CMS letter correctly acknowledges that health status is about more than access to healthcare, pointing specifically to education, employment and income as important social determinants of health. Unfortunately, CMS uses this fact as a convenient front to scoop up the work requirement, a misguided and overly simplistic policy idea that’s been floating around in the soup for decades, and spill it all over state Medicaid programs.

Poor Health Alphabet Soup 350x272It’s obvious that this move isn’t really about improving anyone’s health, as a report released by the League this week points out, especially when viewed in the broader context of Republican proposals to decimate the federal services that have a positive impact on virtually all social determinants of health for people with low incomes.

Since we’re already on the subject of food, let’s talk about hunger, which triggers a domino effect of poor health outcomes with high social and economic costs. This year, President Donald Trump is calling for a number of devastating cuts and changes to the Supplemental Nutrition Assistance Program that would leave children, seniors and people with disabilities without enough to eat.

Despite the critical connection between housing and health, the president wants to cut safe, affordable housing programs and increase the burden on participating families. To make matters worse, by slashing the corporate tax rate, the recently enacted tax bill reduces the value of the low-income housing tax credit—a move that’s expected to discourage the construction of 250,000 affordable units, which are already in alarmingly short supply, over the next 10 years.

Regarding education, the president wants to slash billions of dollars from K-12 and funnel millions into unhealthy abstinence-only sex education programs. Furthermore, he seeks to expand the use of taxpayer-funded private school vouchers, which have been shown to largely benefit families that can already afford to send their children to private schools and enable discrimination that drives educational and health disparities.

If this were really about health, the president wouldn’t prioritize law enforcement based on the toxic ingredients of xenophobia and racism or let healthcare providers discriminate against their fellow humans in need of medical care.

Don’t be fooled: the Medicaid work requirement is merely a pretense for kicking people off Medicaid, something conservative policymakers have wanted to do for a long time. Combined with the proposed cuts to all of the other services that help struggling families maintain a basic standard of living, it will only reinforce the very economic conditions that create health disparities in the first place.

Poverty and its associated health impacts are complex problems that can’t be solved by simply requiring people to work. We need policies and budgets that actually promote living wages, job training, educational opportunity, healthy food access, healthy housing, transportation, quality child care, freedom from violence and trauma, and racial equity. If this were my favorite cooking competition show, I’d say the chef who created this disingenuous policy soup should be chopped in the appetizer round.

— Julie Cassidy

U.S. House and Senate budgets make billions in cuts for Michigan residents to pay for tax cuts for the ultra-wealthy

For Immediate Release
October 05, 2017

Contact:
Alex Rossman
arossman@milhs.org
517.487.5436

Budgets threaten food assistance, Medicaid, disability programs, education, job training and more

LANSING—Today the U.S. House of Representatives passed a 2018 budget resolution that would slash billions of dollars from vital programs like food assistance and Medicaid that help millions of Michigan families afford necessities and get ahead. These damaging cuts at the expense of working Americans are designed to set up massive tax cuts for corporations and the very wealthy. The U.S. Senate’s budget resolution would have similar, harmful effects on Michigan residents.

The Michigan League for Public Policy has been warning residents about the impending devastation in President Donald Trump’s federal budget proposal and Congress’ continuation of its priorities. The federal budget was a primary focus of the League’s public policy forum held yesterday, and the League also recently developed a new fact sheet on the top threats to Michigan in the federal budget. The forum’s keynote speaker was Bob Greenstein, President and Founder of the Washington, DC-based Center on Budget and Policy Priorities, which has also prepared a report on the federal budget.

“Yesterday, hundreds gathered at the Michigan League for Public Policy’s policy forum to share their concerns about the impact of federal policies on our state. Today, those fears came one step closer to coming true,” said Karen Holcomb-Merrill, Vice President of the Michigan League for Public Policy. “The Michigan budget’s dependence on federal funds—currently accounting for 42 percent—makes our state particularly vulnerable to these federal cuts, and Governor Rick Snyder and legislative leaders in Michigan need to send their Republican counterparts in Washington a strong message opposing these cuts.”

An analysis by the League shows that Michigan is the second-most reliant on federal funds in the U.S., with 42 percent of our state budget coming from federal funds. The League has been urging Michigan residents to contact their members of Congress to oppose the cuts in the federal budget, but today’s vote still broke along party lines.

Both the House and Senate budgets set up a fast-track, partisan process for passing massive tax cuts for the wealthy and corporations. The GOP tax plan, released last week by congressional Republicans and the White House, would overwhelmingly benefit the top 1 percent in Michigan, who would receive 62.5 percent of the tax cuts, a new analysis released by the Institute on Taxation and Economic Policy (ITEP) shows. In Michigan, taxpayers who make over a million dollars each year (only .2 percent of Michigan’s population) would see an average tax cut of $253,500  while the bottom 20 percent of Michiganians would only see 1.1 percent of the tax cuts—or an average of $70, according to the ITEP analysis. The middle fifth of households in Michigan, people who are literally the state’s “middle-class,” would receive just 7.1 percent of the tax cuts that go to Michigan under the framework at an average of $440.

Not only would these tax cuts overwhelmingly benefit the very wealthy, they could also pile trillions onto deficits and likely force further cuts to health coverage and critical programs like education, and job training—and put more pressure on Social Security.

“The president and Congress appear to have the same misguided infatuation with tax cuts that some Michigan legislators have, and with this budget, they could decimate our revenue and devastate the services our state residents depend on,” Holcomb-Merrill said. “But residents still have power. Just as their voices and stories have helped fend off the repeal of the Affordable Care Act and a cut to the state income tax, they can fight back against these federal cuts.”

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The Michigan League for Public Policy, www.milhs.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.

Red alert: Delay on healthcare is time to redouble efforts

Monday, the Congressional Budget Office (CBO) released its score on the U.S. Senate healthcare bill, the Better Care Reconciliation Act or BCRA. According to the report from the nonpartisan CBO, nothing in the bill makes care better and it is largely a continuation of the flaws in the House-passed healthcare bill.

Over the last two days, a vote by the Senate on their healthcare bill went from imminent to delayed at least a week. But we still need to keep fighting and make sure everyone knows how bad the BCRA is.

The CBO report shows that under the Senate healthcare plan:

  • 15 million people would become uninsured in 2018, with a total of 22 million people by 2026.
  • Federal funding to states for Medicaid would decline by $772 billion, forcing states to increase provider rates or reduce care. These cuts would also force states to look at funding priorities whether it be infrastructure, education or healthcare.
  • States’ Medicaid expansion programs would be phased out. In Michigan, that would mean the over 670,000 Michiganians who receive care through the Healthy Michigan Plan would lose health coverage.
  • Individuals may lose coverage to critical health services including treatment for substance use disorders and maternity care.
  • Average healthcare premiums would go up 20% in 2018.
  • Individuals who are low income will pay more for less comprehensive coverage.
  • Four million people with employer-sponsored coverage would lose insurance.
  • Nearly all of the coverage gains experienced under the ACA would be eliminated by 2026 and the uninsured rate among the non-elderly would rise almost to its 2010 level, before the ACA took effect. (Under the ACA, the uninsured fell to a historic low of nine percent.)

I’ll admit, I have been having a hard time over the past couple of months thinking that legislation that hurts this many people would and could actually pass. I understand that there is a legislative process and following the announcement that the vote will be delayed, I’m sure that over the coming days and weeks we will see changes made to this bill, but changes may still result in large sums of people losing life-saving care.

CBPP BCRA-AHCA Comparsion 575x525

I want to enjoy my Fourth of July and I want you to do the same, but maybe you can also take a few minutes over the next couple of weeks to call Congress at (202) 224-3121 or attend an event or town hall and tell your Representative that you will not accept any healthcare bill that:

  • Reduces healthcare coverage;
  • Ends Medicaid expansion and the Healthy Michigan Plan;
  • Ends the traditional Medicaid program as we know it through per capita caps or block grants; and
  • Makes individual market coverage less affordable.

This delay on a vote is a great sign, but the fight is not over. We must keep up our pressure on our members of Congress. Thankfully, Michigan’s two U.S. Senators Debbie Stabenow and Gary Peters have already come out in strong opposition to the BCRA (but it doesn’t hurt to thank them for their support). The lives, safety net and economic peace of mind of our fellow Michiganians and Americans are at stake.

— Emily Schwarzkopf

Trump budget is anti-poor people, not anti-poverty

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This past month saw two disastrous pieces of public policy come out of Washington: the American Health Care Act (AHCA) passed by Republicans in the U.S. House of Representatives and President Donald Trump’s federal budget proposal.

three fifths cuts in trumps budgetWe provide a more substantive update on the AHCA below, but here’s what you really need to know: It raises costs, reduces coverage and slashes funding for states. In short, it’s bad, and we’re hopeful that leveler heads in the U.S. Senate will agree.

But that was just the appetizer. On May 23rd, President Trump released his budget proposal, and it is an all-out assault on people who are struggling in our state and our nation. We were expecting significant cuts to vital programs based on the president’s “skinny budget,” but it is far worse than anyone could imagine.

If the president is looking to make history and leave his mark, this awful budget will certainly do that. Our colleagues at the Center on Budget and Policy Priorities say that his budget “contains the largest dollar cuts to programs for low- and moderate-income people proposed by any president’s budget in the modern era,” cutting these programs by an estimated $2.5 trillion over the next decade. About 59% of the president’s budget cuts would come from programs and services that help struggling families build a better life and keep food on their tables, clothes on their backs and a roof over their heads.

SNAP cutsFood assistance through the federal Supplemental Nutrition Assistance Program (SNAP) would be slashed by $193 billion over 10 years, targeting the elderly, working families and workers struggling to find a job. On top of the massive cuts to Medicaid in the House-passed AHCA, Medicaid would be cut by an additional $600 billion over 10 years. Possible per capita caps on Medicaid would make it even worse.

People who are struggling economically are not the only vulnerable residents who are being exploited by this budget. Disability programs would be cut by $72 billion, including Social Security Disability Insurance for workers with disabilities and their families and Supplemental Security Income, which provides income assistance to individuals with low incomes, including children, with disabilities.

There are also significant cuts to Great Lakes funding, other protections for our air, land and water, and other programs that are essential to our quality of life and our way of life in Michigan.

As our recent 2017 Kids Count in Michigan Data Book and Making Ends Meet report show, millions of people and kids in Michigan are either living in poverty or barely getting by. Many families have yet to feel any economic recovery and are one emergency or unexpected expense away from financial disaster. More people are working, but in lower-paying jobs, and they depend on food assistance, Medicaid and other programs to survive—programs that would be decimated under President Trump’s budget. Michigan is particularly vulnerable to President Trump’s budget cuts, as we’re the second most reliant on federal funds of any state in the nation.

Our congressional delegation must oppose this budget and any others that follow in this same direction of harming our state’s most vulnerable residents, especially our children. They need to hear from the people that these appalling cuts will hurt and put names and faces to the lives that hang in the balance. If you or someone you know depends on food assistance, Medicaid, disability services or other federal programs, I urge everyone to share their story at Handsoff.org. And whether you use these programs yourself or just know that they are vital to a better Michigan for all, I encourage you to contact your congressperson directly and tell them to oppose the Trump budget or any other proposal that includes massive cuts to these programs.

— Gilda Z. Jacobs

CB…oh no?!

Earlier this month, the House Republicans in Congress passed the American Health Care Act (AHCA) without an updated Congressional Budget Office (CBO) score. The CBO is an independent, nonpartisan office that analyzes the cost and impact of proposed federal legislation. Wednesday, in full nerd behavior I anxiously awaited the release of the new report.

While earlier versions of the AHCA revealed that over 24 million people would lose their health coverage, the effect of amendments that allowed for waivers for essential health benefits and pre-existing conditions was not yet known … until now. (Yes, 20 days after the bill was voted on by the House). What we know from the newest CBO score is that not much has changed. According to the report released yesterday:

CBO Uninsured Rate F 448 x 457

  • 23 million more people would be uninsured by 2026;
  • $8 billion dollars allocated for high-risk pools would not be sufficient to cover the large increases in premiums for high-cost enrollees;
  • Medicaid enrollment (including children, people with disabilities and the elderly) would decrease by 14 million people;
  • People needing maternity, substance abuse & mental health care would incur thousands of dollars in extra out-of-pocket costs in states who apply for a waiver.
  • Premiums would go up 20 percent more than current law in 2018.
  • In states that pursue waivers, the report says that average premiums would fall but “less healthy people would face extremely high premiums.”

Last week, our national partners at the Center on Budget and Policy Priorities released two reports on the effects the AHCA has on rural America and home- and community-based services. Both of these reports once again put on display the great harm this legislation would bring.

One of the things that really stood out to me was the huge effect the AHCA would have on our rural Michiganians. In Michigan, 113,800 people in rural communities gained coverage through Michigan’s Healthy Michigan Plan. That’s nearly 20 percent of the total enrollment of the program. Those suffering from opioid addiction (of which rural Michigan has been greatly affected) have been particularly helped by the expansion of Medicaid. The coverage gained allowed these people to access the necessary treatment and education they need to fight this growing epidemic.

Home- and community-based services are optional services that states are not required to provide but many individuals rely on as a way to receive care at home rather than in a nursing home. In 2013, 102,810 Michigan residents relied on these services. Restructuring Medicaid through per capita caps and the ultimate end of Medicaid expansion would result in a significant cost shift to states, so much that states could choose to no longer provide these important services to seniors and people and kids with disabilities.

There is no doubt that the Affordable Care Act needs to be improved and as the U.S. Senate moves forward in its process, we can hope that they look at this data to develop legislation that rejects caps on the Medicaid program, continues successful Medicaid expansion programs—including Michigan’s Healthy Michigan program, and increases the number of insured individuals.

We know you are being pulled in a lot of directions right now, but we still have a lot of work to do on the healthcare front and we need you to keep fighting. We have a helpful website set up with our coalition partners so you can contact your member of Congress, and all these reports to help keep you informed on the devastating impact of the AHCA. And they come in handy when you battle your friends on the intricacies of Medicaid financing … oh wait, I’m the only one that does that?

— Emily Schwarzkopf

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.

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