Michigan and the ACA’s Medicaid expansion

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AutoInsuranceMM.Info – What is the Insurance – Michigan and the ACA’s Medicaid expansion

Republican Governor Rick Snyder pushed for an alternative approach to Medicaid expansion in Michigan and ultimately gained bi-partisan support for the plan, which is called Healthy Michigan. Sign up for the program began April 1, 2014, and by April 2018, 689,764 people had enrolled in Healthy Michigan coverage. Enrollment increased rapidly in 2014 and 2015, and has continued to increase slowly since then.

As of April 2018, some Healthy Michigan enrollees were transitioned to private plans (MI Marketplace Option). This includes people with income above the poverty level who had been enrolled in Healthy Michigan coverage for 12 or more consecutive months, and who did not participate in the Healthy Behaviors Incentives Program or receive a medical exemption.

By January 2018, total enrollment in Medicaid/CHIP in Michigan had reached 2,346,905, which was a 23 percent increase over the enrollment total at the end of 2013. This total includes people who were already eligible for Medicaid based on the pre-ACA (Affordable Care Act) guidelines, as well as the nearly 700,000 people who have enrolled as a result of Medicaid expansion.

Governor urged Congress to leave Healthy Michigan intact

The future of the ACA was uncertain at the start of the Trump Administration. GOP lawmakers failed in their 2017 efforts to repeal major portions of the ACA (only the individual mandate penalty was repealed, and that doesn’t take effect until 2019), but there are still proposed regulations that would undermine the ACA and make it harder for people to qualify for expanded Medicaid.

IN 2017, Snyder urged lawmakers to leave Healthy Michigan intact, calling it a “successful” program, and a “good role model” for other states. University of Michigan researchers report that Medicaid expansion in Michigan has resulted in about 30,000 new jobs, and a $2.3 billion increase in personal income in the state in 2016. The researchers also determined that Michigan saved $235 million in 2016 as a result of Medicaid expansion, thanks to federal Medicaid funds covering some prison health care costs that were previously covered by the state.

Michigan lawmakers approve Medicaid work requirement that would require federal approval and take effect in 2020

The Michigan legislature approved a Medicaid work requirement during the 2018 session (the version that was sent to the governor is summarized here). Enrollees could be noncompliant (either not working or not reporting their work to the state) for up to three months in a 12-month period, but after that they would lose eligibility for Medicaid for at least a month and wouldn’t be able to reenroll without becoming compliant with the work requirement.

SB897 passed the Senate in April, almost entirely along party lines (all Democrats in the Senate voted no, as did one Republican, Senator Margaret O’Brien; the remaining Republicans all voted yes). The measure passed the House in June (again, almost entirely along party lines — one Republican joined Democrats in voting against it, while the other 61 Republicans all voted in favor of imposing a work requirement for Medicaid). Although Governor Snyder had opposed some provisions in the Senate’s version of the bill, it appears that he’s likely to sign the version that the House passed in June.

If Governor Snyder signs the legislation, the state would then have to seek an 1115 waiver from the federal government in order to implement the work requirement, which would take effect in January 2020 if approved by the Trump Administration (assuming a lawsuit that’s been filed over Kentucky’s Medicaid work requirement doesn’t derail the idea of work requirements altogether). The Trump Administration has already approved work requirements in Kentucky, Arkansas, New Hampshire, and Indiana. (only the Arkansas work requirement has been implemented thus far, as of June 2018).

The legislation initially called for non-exempt individuals to work at least 29 hours per week in order to be eligible for continued Medicaid coverage, but that was later amended to be 80 hours per month, which is more in line with what other states have proposed or are implementing. The Senate bill also would have exempted people in counties where unemployment exceeds 8.5 percent. But that provision was controversial, as it essentially would have exempted rural areas (with predominantly white populations) but not urban areas like Flint and Detroit (with people of color making up a larger percentage of the population), because although there are pockets of high unemployment, they don’t extend to the entire county. That provision was also scrapped in the version of the bill that was sent to Gov. Snyder.

Various populations would be exempt from the work requirement, including those with disabilities, the medically frail, people under 19 (under 21 if a former foster care youth) or over age 62, pregnant women, full-time students, people who are caretakers of a child under six or an incapacitated person who needs full-time care (only one adult per household would be exempt as a caretaker), and people receiving unemployment benefits or recently released from incarceration.

The fiscal note for SB897 provides rough estimates of the number of people expected to be exempt. The work requirement would apply to an estimated 670,000 non-disabled Healthy Michigan (Medicaid expansion) enrollees. An estimated 130,000 of them would be exempt, with the other 540,000 having to comply with the work requirement.

The majority of able-bodied Medicaid recipients are already working or attending school, but the House fiscal analysis projects that enrollment in Healthy Michigan will decline by somewhere between 5 percent and 10 percent as a result of the work requirement. Loss of access to Medicaid could be due to increased income that makes a person ineligible for Medicaid, or failure to comply with the work requirement or the reporting requirements that go along with the work requirement).

The fiscal note estimates that after the work requirement is fully implemented and the upfront costs are completed, the work requirement could save the state of Michigan between $5 million and $20 million per year. This would be due to the reduction in enrollment in Healthy Michigan, which is ultimately the goal of Medicaid work requirements. As Michigan Senate Minority Leader, Jim Ananich (D, Flint) has said, if the goal were to boost employment, “we’d put money toward daycare, we’d put money toward transportation, we’d make sure the talent programs we’re talking about funding were already in place.” But instead, the goal is a reduction in the number of people covered by Medicaid expansion, and a work requirement is an effective way to do that. It also makes it easy to blame the loss of coverage on the individuals themselves (ie, they should have gotten a job) rather than addressing things like intergenerational poverty.

SB897 also requires the state to seek a waiver from CMS to allow for new eligibility rules for people who have been enrolled in Medicaid expansion for at least 48 months and whose income is above the poverty level (ie, between 100 percent and 138 percent of the poverty level). Assuming CMS approves the waiver, these individuals would have to complete a “health behavior assessment” with increasingly challenging healthy behavior requirements, and they would have to pay 5 percent of their income in premiums (note that under the ACA, in states where Medicaid has not been expanded, people in this income range pay up to slightly more than 3 percent of income for the second-lowest-cost silver plan in the exchange — although Medicaid has lower out-of-pocket costs than a plan in the exchange, even with cost-sharing reductions).

The legislation calls for Medicaid expansion in Michigan to terminate if CMS doesn’t approve the waiver or something substantially similar.

Michigan’s eligibility guidelines

You qualify for Medicaid in Michigan if your household income is below the following limits:

  • 195 percent of the federal poverty level for infants under 1 year old
  • 160 percent of FPL for children 1-18 years old; children with slightly higher household income — up to 212 percent of FPL, qualify for the Children’s Health Insurance Program, which is called MICHILD in Michigan
  • 195 percent of FPL for pregnant women
  • 133 percent of FPL for parents and other adults (the eligibility calculation includes a built-in 5 percent income disregard. So eligibility actually extends up to 138 percent of FPL).

While these are the main groups covered by Medicaid, other people — such as those who are blind or disabled — may also qualify. See the Department of Community Health website for more information on covered groups and eligibility guidelines.

Use the annual income chart from Medicaid.gov to see FPL shown as dollar amounts.

Enrolling in Medicaid

Here is how you can apply for Medicaid:

  • Apply online using MI Bridges, or enroll through Healthcare.gov.
  • Fill out a paper application (the form is DCH-1426) and turn it in at a local office, by fax, or by mail. The mailing address is Health Insurance Affordability Program; Michigan Department of Community Health; P.O. Box 30273; Lansing, MI 48909. Find the location or fax number for a local office.
  • Get help with your application by calling the application help line at 1-855-276-4627.

Michigan expands, reforms Medicaid. Enrollment surpasses projections

At the end of 2013, Michigan received federal approval to expand and reform its Medicaid program. Within the state, the expansion program is known as Healthy Michigan.

The state needed special approval — in the form of two federal waivers — for new cost-sharing requirements. Enrollees with incomes between 100 to 138 percent of the federal poverty level must contribute up to 2 percent of their income to health savings accounts that are administered by the state.

Enrollment for the Healthy Michigan expansion started April 1, 2014, with estimates that 320,000 people would sign up in the first year and up to 470,000 ultimately. As of Jan. 5, 2015, nearly 497,000 people had enrolled in Healthy Michigan. And by April 2018, enrollment had reached 689,764 people.

The path to Medicaid expansion

It took nearly eight months to authorize the Healthy Michigan plan. Republican Gov. Rick Snyder announced his support in February 2013, saying it was a good move for public health and state finances. Snyder had support from numerous health care and advocacy groups, but was opposed by some Republicans in the state legislature.

Ultimately, the state Senate passed Medicaid expansion in late August 2013 after an eight-hour session. The House followed suit a few days later, passing it in early September, and Snyder signed it into law on Sept. 16, 2013. University of Michigan Medical School researchers believe the state’s bi-partisan solution could be a model for other states that have yet to expand Medicaid.

While the Senate passed Medicaid expansion, it also prevented it from taking effect immediately and delaying the start of Healthy Michigan enrollment until April 1, 2014 (instead of January 1, 2014, which is when Medicaid expansion took effect in states that implemented it as called for in the ACA, without changes). The Department of Community Health said each day’s delay would cost the state $7 million in federal funding.

While the delay had a negative financial impact, it was also credited as a factor in the successful rollout of the program. Michigan was able to use the first three months of 2014 to plan and to build awareness, leading to rapid uptake of the program once enrollment began.

Second waiver keeps Healthy Michigan alive

In December 2015, CMS approved Michigan’s second waiver, albeit an adjusted form of the waiver that the state had submitted. The legislation Michigan had passed called for changes to Medicaid eligibility after an enrollee had been in the program for 48 cumulative months. Michigan’s plan was to have individuals at that point either switch to a QHP through the exchange (subsidized with Medicaid funds), or remain in the Healthy Michigan Plan but with cost-sharing of up to 7 percent of income (with an opportunity to reduce the cost-sharing by participating in various healthy behaviors).

Some of this (the 7 percent of income cost-sharing, and the 48-month time limit) presented problems for the Obama Administration CMS, but the waiver had to be approved in order to keep the Healthy Michigan program active past April 2016, as the stipulations had been built into the state law.

So CMS worked with Michigan officials to reach a compromise: As of April 1, 2018 (four years after Healthy Michigan took effect), some Healthy Michigan enrollees with income above the poverty level (ie, between 100 percent and 138 percent of the poverty level) must either switch to a QHP subsidized with Medicaid funds, or work with their doctors to fulfill the healthy behavior requirements to remain on the Healthy Michigan Plan.

This change applies to people who have been enrolled in Healthy Michigan for 12 or more consecutive months. And there’s no longer a mention of cost-sharing amounting to 7 percent of income, but there is still an opportunity for enrollees to reduce their cost-sharing via healthy behaviors. It should be noted, however, that about 80 percent of Healthy Michigan enrollees have income below the poverty level, and the second waiver makes no changes to their coverage under the program.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.