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Feds, State reach compromise to keep Healthy Michigan in place

December 22, 2015

Gov. Rick SNYDER’s administration and the federal government have reached a deal on a crucial waiver that will keep the state’s Medicaid expansion program in place. But the way the program will unfold is likely not exactly how some state lawmakers originally envisioned it.

Today, after months of behind-the-scenes talks, the Michigan Department of Health and Human Services (DHHS) announced that the Centers for Medicare and Medicaid Services (CMS) had approved the required second waiver. 

Under a 2013 state law, the state had to get the waiver approval by the end of the year in order to maintain Healthy Michigan, the Medicaid expansion program that has about 583,000 beneficiaries across the state. 

The terms of the second waiver represent a compromise between Snyder’s administration and CMS, announced just two weeks before the deadline. 

State officials believe the details of that compromise fall within the 2013 state law that expanded Medicaid here. And federal officials believe the compromise doesn’t set a precedent for states across the country. Some had feared the Michigan waiver, as set in law, might do just that. 

According to a statement from Snyder’s administration, under the approved waiver, Healthy Michigan Plan participants in the expanded population, with incomes between 100 percent and 133 percent of the federal poverty level, must work with their physician on strategies to lose weight or quit smoking, or must adopt other healthy behaviors. 

“If they choose not to do this, they must obtain health insurance through the federal exchange,” the statement said. 

Those required healthy behaviors would then allow participants to reduce cost-sharing requirements set in the original law. 

The policy would take effect April 1, 2018, four years after the law took effect. 

The policy in the waiver is at least somewhat different than the specific language laid out in   HB 4714of 2013, which allowed for Medicaid expansion in Michigan in the first place. 

But DHHS doesn’t believe it will have to go back to the Legislature to approve the new plans. And NickLYON, director of DHHS, told reporters today that the waiver builds upon the concept of personal responsibility, an emphasis of the initial bill. 

Under the originally proposed components of the second waiver, the state would be allowed to set up required options for individuals who had received coverage for 48 months — four years — and who were between 100 percent and 133 percent of federal poverty guidelines. 

Individuals who have had coverage for 48 months would need to choose between moving to the health care exchange and upping their financial stake in their Medicaid coverage. Under the second alternative, an individual’s maximum cost sharing would go from 5 percent of income to 7 percent and the premiums would go from 2 percent of income to 3.5 percent. 

In harmony with the waiver, the original bill language did provide an opportunity for beneficiaries to reduce their cost increases through demonstrating healthy behaviors. 

“I think we’re well within the parameters of the statute,” Lyon said of the approved waiver. 

Some national health-care advocates had argued that the potential, under the original law, for some enrollees to have to pay up to 7 percent of their income for cost sharing was too high. 

Under the approved waiver, which requires healthy behaviors that then knock the cost sharing increases, Lyon agreed that it was possible but not likely that anyone in Michigan would ever pay the 7 percent cost-sharing rate originally envisioned in the law. 

The approved waiver also still allows some of those eligible for Medicaid expansion to move to the health insurance exchange. 

But the terms and conditions of the waiver says beneficiaries in the exchange still “may be charged premiums in amounts that do not exceed 2 percent of household income and beneficiaries shall have the opportunity complete healthy behaviors and have the option to enroll in the Healthy Michigan Plan.” 

The original 48-month time period and the cost-sharing increases had been questioned by some national health care organizations. 

Multiple national health-care advocacy groups, like the National Health Law Program, have argued in statements to the federal government that putting a time limit on coverage, like the 48-month one described in the law, would break with traditional Medicaid policy, designed to help those in financial need. 

Others have said the federal government’s approval of the original Michigan waiver would set a national precedent. 

“This would be the first time, to our knowledge, that CMS has ever approved any such changes tied solely to time receiving Medicaid,” wrote Dee MAHAN and Andrea CALLOW, earlier this year. “Such a dramatic change is not properly undertaken, at the administration level.” 

That didn’t happen in the approved waiver. 

On the other side of the matter, the 48-month timeframe and the cost-sharing increases helped get Republicans on board for expanding Medicaid in 2013. Republicans, at that time, sold the legislation as a “Medicaid reform” instead of an expansion. 

The bill’s original sponsor, former Rep. Matt LORI (R-Constantine), said in a 2013 press release about the bill, “After 48 months, new recipients will either purchase private insurance coverage through the exchange or remain on Medicaid while increasing their cost-sharing requirements.” 

Rep. Al PSCHOLKA(R-Stevensville) and Sen. Mike SHIRKEY (R-Clarklake) were also closely involved in the legislation. Today, they said they were just beginning to examine the waiver. 

Shirkey said the approved waiver looked “promising.” 

“However, it does require full scrutiny that it allows us to be in full compliance of the Healthy Michigan legislation,” Shirkey said. 

Pscholka said the waiver sounded workable. Likewise, Pscholka said Healthy Michigan is working. 

The program started officially 2014. 

Pscholka faced a Tea Party primary challenger last year who focused on his Medicaid expansion support. Pscholka said he recently received a call from a mother of two children who apologized for his primary. 

The woman told Pscholka that through Healthy Michigan she received a screening that found she had breast cancer. Healthy Michigan, she said, saved her life. 

“You’re the reason why we did this,” Pscholka said he told the woman.  

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