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Tuesday, 27 August 2013 23:54

Michigan Senate approves Medicaid expansion; House to vote next week

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Screen capture from Gov. Snyder press conference announcing the state Senate passage of Medicaid expansion. Screen capture from Gov. Snyder press conference announcing the state Senate passage of Medicaid expansion.

State government came one step closer to expanding Medicaid coverage to as many as 470,000 more people in the state who otherwise lack health insurance.

After a day of tough political debate and politicking, the state Senate on Tuesday evening voted 20-18 to approve a proposal to expand Medicaid and implement reforms to control costs that have long been sought by business advocates.

The legislation, backed by Gov. Rick Snyder, now goes to the state House, which earlier this year passed its own version of Medicaid expansion that failed to gain support in the Senate. The House is scheduled to vote next week on the Senate version.

In endorsing the legislation, business groups touted the reforms they believe have been needed for years in Michigan's Medicaid system, plus the potential to erase the costs of uncompensated care that cost hospitals hundreds of millions of dollars annually, a portion of which ends up on the bills of people with private health coverage.

Hospitals routinely shift some of the cost for uncompensated onto private payers. A 2008 analysis by the actuarial and consulting firm Milliman estimated that cost-shifting, at that time, added $1,512 annually to the premiums for a health insurance policy for a family of four, with $1,115 of that picked up by employers.

"We've said from the beginning, this is a matter of cost," Small Business Association of Michigan President Rob Fowler said during a Tuesday evening press conference hosted by Gov. Snyder. "We believe tonight we've made a big difference in the cost of health insurance going forward."

Deep opposition to expanding Medicaid came from within Gov. Snyder's own political party. Senate Republicans largely opposed Medicaid expansion, primarily because of their strong objections to the federal Affordable Care Act, a law that allows the move.

The bill that ultimately passed the Senate had initially stalled earlier in the day after a 19-18 vote, one vote shy of what was needed for passage. It passed after Sen. Tom Casperson, R-Escanaba, who initially voted "no," changed his vote when the bill was reconsidered.

The legislation, as passed in the Senate, would couple expansion with reforms. They include requiring the Michigan Department of Community Health to look at ways to improve the effectiveness of the Medicaid program and lower costs; requiring the department to develop financial incentives for care providers to meet cost, quality and utilization targets; requiring the state to develop incentives for Medicaid recipients to improve and maintain their health; and limiting payments to hospitals for Medicaid patients to no more than 115 percent of what Medicare would pay for their care.

"This is not generic Medicaid expansion," Snyder said. "This is a Michigan version that talks about personal responsibility, that talks about wellness."

The federal government would pay 100 percent of the costs for Medicaid expansion for three years, and then cover 90 percent in subsequent years with the state covering the rest.

The state would need federal waivers to implement the reforms with the expansion of Medicaid. If the reforms fail to generate the cost savings desired within three years, the expansion of Medicaid eligibility would expire.

Gov. Snyder and others who backed the legislation argued that expanding Medicaid would curtail cost-shifting and provide thousands of people who are now uninsured with access to the care they need, when they need it. It also would cut costly visits to hospital emergency rooms by people who are uninsured, as well as alleviate uncompensated care when those people are unable to pay their medical bills, Snyder said.

"Uncompensated care is a terrible answer for Michiganders in terms of health insurance costs. We pay for that today," Snyder said. "What's better? To have someone forced to go to the ER and how expensive that is, versus seeing a primary care physician and doing preventative care? It's a better answer.

"This isn't about the Affordable Care Act. This is about one element that we control here in Michigan that can make a difference in people's lives, and a sincere difference in their lives."

An annual Michigan Health and Hospital Association (MHA) report estimated bad debt at hospitals statewide for the 2011 fiscal year – the most recent year for which data are available – totaled $515.9 million.

The legislation requires the Department of Insurance and Financial Services to annually study the impact that expanding Medicaid has on cost-shifting and, ultimately, private health insurance rates.

Without the support of business groups that otherwise loathe the Affordable Care Act, MHA Vice President Brian Peters said the Medicaid expansion bill “probably would not have passed.”

The view business groups in Lansing hold toward Medicaid expansion is illustrated in a statement today from the Michigan Chamber of Commerce.

“Make no mistake: The Michigan Chamber remains strongly opposed to Obamacare and we fought all the way to the U.S. Supreme Court to stop it,” said Jim Holcomb, senior vice president and general counsel for the Michigan Chamber. “However, Obamacare is the law of the land and our members believe passing Medicaid reform is good policy that makes sense for all of Michigan.”

Backers of the bill argued that helping lower-income people who are uninsured – the so-called "working poor" – gain regular access to a doctor also will result in a healthier population, saving costs in the long run.

"The right thing was done by putting patients first," said Dr. Ken Elmassian, D.O., the president of the Michigan State Medical Society and director of cardiac anesthesiology and co-chief of staff at McLaren Greater Lansing Hospital.

Read 76865 times Last modified on Wednesday, 28 August 2013 11:02