December 23, 2018
Columns Article 11426

MEDICAL CUT FEARS: New Policy May Displace Thousands From Coverage

New Plan May Add to Rolls of Uninsured, Says' 'Think Tank'

December 23, 2018
By: Dave Rogers

Michigan is proposing to take Medicaid away from expansion beneficiaries for not meeting work requirements and to impose higher premiums.

On the face of it, this appears to be a policy that will cause distress in many Michigan families.

One study of Michigan's Medicaid expansion showed that more than half of working expansion beneficiaries had a serious physical health condition such as heart disease, asthma, or diabetes, and 25 percent had a mental health condition, often depression.

When conditions like diabetes, heart disease, or depression are treated and controlled, individuals with these conditions may be able to hold a steady job. For example, a long-term randomized trial found that providing older adults with regular care for heart disease increased their earnings, likely by reducing their time out of work due to illness. By contrast, if chronic conditions are untreated, work may become impossible. Work requirements can create a vicious cycle in which health setbacks lead to job loss, which in turn leads to loss of access to treatment, making it difficult or impossible to manage health and regain employment.

The new policy has drawn concern, especially from the Michigan League for Public Policy (MLPP), which estimates they will likely lead to significant coverage losses and add new costs to the state's budget.

The Michigan House Fiscal Agency estimates that up to 54,000 Michiganders would lose Medicaid coverage through the implementation of the state's proposal to take Medicaid away from people who don't meet the work requirement. And recent evidence from Arkansas suggests coverage losses could be even greater, given the thousands who have already lost coverage in that state as a result of similar requirements, and the difficulty in reporting compliance with them.

Section 1115 of the Social Security Act allows the Secretary of Health and Human Services (HHS) to approve demonstration projects that promote Medicaid's objectives. A "central objective" of Medicaid is providing affordable coverage to people who would otherwise be uninsured, a federal court recently noted in vacating the approval of a Kentucky waiver that included a work requirement and new premiums. Michigan's waiver, which would lead to significant coverage losses and undermine the gains the state has made in the health and financial well-being of low-income Michiganders, likewise fails to promote Medicaid's objectives.

Michigan's Successful Medicaid Expansion

Healthy Michigan began in April 2014 under the authority of a section 1115 waiver, enabling over 1 million Michiganders with incomes below 138 percent of the poverty line who were previously uninsured or under-insured to gain coverage.[4] Like Medicaid expansion nationwide, Healthy Michigan has led to significant progress in cutting Michigan's uninsured rate, improving access to care and the physical and financial health of Medicaid beneficiaries, and generating revenue and other economic benefits by strengthening the state's budget and hospital budgets:

Uninsured rate cut in half.

Michigan's uninsured rate has decreased by 50 percent overall and by at least 40 percent in all but one of the state's counties since the state implemented Healthy Michigan in 2014.

Wayne County, which includes Detroit, has seen a 55 percent drop, while rural Alpena and Gogebic counties have seen drops of 56 and 52 percent, respectively.


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