Medicaid and funding issues dominate the health care agenda in 2016 for advocacy groups in Lansing.
One of the biggest pending issues moved close to resolution when the state House and Senate late last month passed a renewal of the Health Insurance Claims Assessment (HICA), which is used to support Medicaid. Under a bill that was awaiting Gov. Rick Snyder’s signature as this report went to press, the 0.75-percent health care insurance assessment will continue through 2020. The assessment, which generated $228.6 million in the state’s 2015 fiscal year, would have expired at the end of 2016 without renewal.
“It creates a little more certainty at least for the next four years in terms of dollars,” said Rick Murdock, executive director of the Michigan Association of Health Plans.
The MAHP supported renewal of the claims assessment, which has been in effect since January 2012. The renewal was strongly opposed by some business groups such as the Michigan Chamber of Commerce, who viewed it as a tax contributing to the high cost of health coverage.
The assessment of 0.75 percent will generate an estimated $240 million to $260 million the first year. It increases to 1 percent to generate an estimated $304.8 million in 2017, when Michigan will no longer apply the state’s 6 percent use tax to health plans as a way to match Medicaid funding.
The loss of revenue generated from the use tax to support Medicaid remains a concern, although after securing renewal of HICA, groups doubt they can muster support to replace that revenue.
“We think that’s the best we can do for now,” said Laura Appel, senior vice president and chief innovation officer for the Michigan Health & Hospital Association. “We’re probably going to be able to absorb the shortfall in the use tax in the short run.”
As debate over the health insurance claims assessment wraps up, finalizing an update to the state’s health insurance code awaits action in the state Senate. Bills previously passed in the House would give health plans greater flexibility to craft new products and would ease the regulatory process to bring them to market.
Specifically, health plans could offer incentives for so-called “healthy lifestyle” benefits or wellness programs. State law presently does not expressly allow for the use of wellness incentives in HMO benefits packages, which often prolongs the regulatory review process when health plans file for the approval of new products.
Lawmakers also will consider Gov. Snyder’s 2017 fiscal year budget proposal that includes shifting funding for behavioral health services to private health plans from community mental health organizations.
Some form of integration between physical and behavioral health is an idea the Michigan Association of Health Plans has pushed for years “to treat the whole person, reduce as much of the administrative costs as possible, and move those dollars into service delivery so we can actually improve not only access but the dollars moving into the behavioral area,” Murdock said.
Gov. Snyder’s budget proposal is “philosophically on the right track,” although the question “is one that quite frankly needs a lot of time and care in terms of how that comes about,” he said.
For the first time in years, the governor’s budget did not propose cuts for graduate medical education or to funding pools that support access and care at small and rural hospitals, said David Finkbeiner, senior vice president for advocacy at the Michigan Health & Hospital Association. Past budget proposals sought to cut about $200 million and eliminate those funds completely, he said.
Given the major pressures on the budget from the Flint water crisis, the Detroit Public Schools and roads, the Michigan Health & Hospital Association is satisfied that the budget proposal maintains funding for health care areas.
“It would be a difficult time to be looking to add back the funds that have supported those programs,” Finkbeiner said.
Other issues this year for the association include tracking reforms to the state’s no-fault auto insurance law that remain pending in the Legislature, as well as a bill to allow certified registered nurse anesthetists to practice independently from physicians. The proposal seeks to address a shortage of anesthesiologists at small, rural hospitals.
Nearly 40 other states have adopted similar laws, Finkbeiner said. The Michigan Health & Hospital Association supports the bills, which had been strongly opposed by the Michigan State Medical Society. The bills, introduced last May, sit in the Senate Health Policy Committee.
Beyond opposition to the bills for CNRAs, the Medical Society backs proposed legislation to eliminate the requirement for physicians to maintain board certification in their practice or specialty area to receive payments from health insurers, secure privileges to practice at a hospital, or to obtain a medical license from the state. Separate bills introduced late last year are pending in the House and Senate.
Dr. Rose Ramirez, a Belmont family physician and president of the Medical Society, said maintenance of certification by professional boards has become a costly, time-consuming process that takes too much of a doctor’s attention away from patient care.
What once involved taking a test every seven years has become an ongoing, “incredibly bureaucratic” process, Ramirez said.
“Over the past few years, it’s become more and more onerous to maintain certification, and they keep jacking up the prices,” she said. “The problem is that it has gotten out of control.”