LANSING — Gov. Rick Snyder today proposed the expansion of Medicaid, saying it “makes sense for the physical and fiscal health of Michigan.”
The expansion — if approved by the GOP-controlled Legislature, where it may find a tough time passing — would immediately make an estimated 320,000 Michigan residents eligible for Medicaid. More than 470,000 Michiganders would become eligible by 2021.
In endorsing the expansion, Gov. Snyder argues that it would reduce Michigan’s uninsured population by 46 percent, increase access to primary care and reduce the uncompensated costs for hospitals to care for people who are uninsured.
Bringing more people into Medicaid and enabling them to better access primary care could alleviate the number of patients who go to high-cost emergency rooms when they have a health problem, Snyder said.
“When you stop and look at Medicaid expansion, the issue really is how do you get better care at a lower cost, and that’s the objective behind all this,” Snyder said during an afternoon news conference in Lansing that was originally organized by advocates of expansion.
Snyder said he was also convinced there was enough capacity among doctors across the state to expand Medicaid, which states have the option to do under the federal Affordable Care Act. The federal government would cover 100 percent of the costs for the first two years and then 90 percent afterward.
The decision was hailed by groups representing health care providers as well as some business organizations.
Small Business Association of Michigan CEO Rob Fowler supports the idea to reduce the level of uncompensated care at hospital that gets shifted onto the prices charged to people who are insured.
“It’s found its way into the base rates of health insurance for small businesses all across the state. And I would say it’s a terrible business model, that we take a growing burden of people who come without compensation and we shift it to a shrinking group of people (small business owners) who struggle to pay for health insurance,” Fowler said. “We support (expansion of Medicaid) because we believe it ultimately can reduce the sort of piling on effect that’s been happening to paying customers for many years.”
The Michigan Health and Hospital Association estimates uncompensated care – a combination of bad debt and charity – cost Michigan hospitals $882 million on the 2011 fiscal year.